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Voyager digital will return 35% of customer funds.

Crypto lender Voyager Digital announced on Wednesday that it will be winding down operations and returning approximately 35% of customers' cryptocurrency deposits. The approval of Voyager's liquidation plan by U.S. Bankruptcy Judge Michael Wiles allows the company to distribute around $1.33 billion in crypto assets to its customers, effectively ending its reorganization efforts under Chapter 11. Customers may expect to make withdrawals starting from June 1, with any additional distributions contingent upon future litigation outcomes.

Voyager had filed for bankruptcy protection in July, citing cryptocurrency market volatility and a default on a substantial loan granted to crypto hedge fund Three Arrows Capital (3AC). Despite two unsuccessful sales attempts during its bankruptcy proceedings, Voyager remains entangled in litigation with FTX, seeking to recover $445.8 million in loan repayments made to Voyager before FTX's own bankruptcy. The potential recovery for Voyager's customers hinges significantly on the resolution of the FTX litigation, with expected recovery increasing to 63.74% if Voyager emerges victorious, as stated in court filings.

To facilitate repayments, Voyager plans to refund customers with the same cryptocurrency they held in their accounts. However, for deposits involving unsupported cryptocurrencies and Voyager's proprietary VGX token, customers will receive repayment in the stablecoin USDC instead.

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Will I Get My Crypto Back From Voyager?

Most Recent Update 04/10/24: Voyager Digital has secured a combined total of $484.35 million from various sources. Further payments are expected to be made in the next few years as assets are sold and litigation recoveries are obtained. All uncashed Voyager checks will be cancelled and deemed unclaimed after Apr. 20, 2024.

The year 2022 witnessed a tumultuous period in the world of cryptocurrencies, leaving many investors in a state of uncertainty. Amidst this chaos, numerous lending services, including prominent platforms like Celsius, FTX and Voyager, experienced significant setbacks. As the dust settles, investors are left questioning whether they will ever recover their crypto investments from Voyager. 

In the aftermath of their bankruptcy filing, Voyager Digital continues to work on recovering funds and stabilizing their financial position while facing other challenges such as security concerns and uncashed Voyager checks amounting to $17 million. Recently, Voyager announced a major milestone for the company , as they managed to secure a total of $484.35 million from various sources, including FTX, Three Arrows Capital (3AC) and Directors and Officers (D&O) insurance settlements. Furthermore, the company has set a deadline of Apr. 20, 2024 for cancellation of all outstanding checks to address logistical issues.

What Happened to Voyager Crypto Exchange?

How to get your crypto back from voyager, how much crypto will i get back from voyager.

• Will I Get Crypto Back from Unsupported Cryptocurrencies on Voyager? 
• What Crypto Accounts Can I Send My Voyager Funds to? 

Voyager was established in 2017 with a mission to provide a user-friendly platform for buying, selling and trading cryptocurrencies . The exchange gained popularity for offering commission-free trading and access to a wide range of digital assets.

In early 2021, Voyager experienced a significant surge in users and trading volume, which strained its infrastructure. This resulted in occasional technical glitches, delays in order execution and customer support challenges. While these issues affected user experience, Voyager continued to expand its offerings and improve its services to address the growing demand.

Voyager's bankruptcy filing sent shockwaves through the crypto industry as it revealed a default on loans amounting to 15,250 BTC and 350 million USDC by Three Arrows Capital in June 2022. Astonishingly, these uncollateralized loans represented more than half of Voyager's loan book, as stated in its public filing for Q1 2022. The significant concentration of risk with a single counterparty has raised serious concerns about the exchange's financial stability.

The bankruptcy filing emphasized that the majority of Voyager's 50 largest unsecured claims were from customers, ranging from approximately $9,771,026.39 to $955,417.27. These customers primarily consisted of retail investors, indicating that the impact of Voyager's bankruptcy extends beyond institutional entities.

To receive your initial crypto recovery in kind from Voyager, it is crucial that you transfer all of your available crypto assets from your Voyager account to a designated wallet address. This transfer can be made to another U.S.-based exchange or a self-custody wallet of your choice. It is important to complete this transfer within a 30-day window.

Failure to transfer your crypto assets in kind during this designated period will result in receiving your initial recovery in U.S. dollars at a later date, which is subject to market fluctuations.

Please take note that if you have a balance of any token that is lower than the required transfer fees, you will not be able to complete the transfer process. In such cases, the crypto assets with balances below the transfer fees will be sold at a later date, and you will receive payment in U.S. dollars.

This process ensures an efficient and seamless recovery of crypto assets for all users, with careful consideration given to token balances and associated transfer fees.

Creditors with any of the 67 "supported" tokens, including popular cryptocurrencies like Bitcoin (BTC) and Ether (ETH) , will have the option to directly withdraw a percentage of their crypto holdings. However, for creditors holding any of the 38 "unsupported tokens," which include assets like Solana's SOL and Algorand's ALGO, Voyager will liquidate those holdings and offer repayment in the form of USD coin (USDC), a stablecoin. This strategic approach aims to ensure that all customers receive appropriate value for their assets, providing clarity and stability in the repayment process.

Voyager Digital's repayment plan aims to return approximately 35% of customers' cryptocurrency deposits. The approved liquidation plan allows for the distribution of around $1.33 billion in crypto assets to customers. The specific amount of crypto that each individual will receive back depends on their initial deposit amount and the proportionate share allocated to them in the distribution process. It's important to note that the repayment amount may vary depending on factors such as the type of cryptocurrency deposited and any applicable deductions or fees. 

Voyager announced that it will return approximately 35% of customers' cryptocurrency deposits. The approval of Voyager's liquidation plan allows for the distribution of around $1.33 billion in crypto assets to customers. 

Voyager's bankruptcy filing, prompted by market volatility and a loan default by Three Arrows Capital, led to unsuccessful sales attempts. The ongoing litigation with FTX, aiming to recover $445.8 million in loan repayments, plays a significant role in determining customer recovery. According to court filings, if Voyager succeeds in the litigation, the expected recovery increases to 63.74%.

To facilitate repayments, Voyager intends to refund customers in the same cryptocurrency they held. 

Will I Get Crypto Back from Unsupported Cryptocurrencies on Voyager? 

Customers who deposited unsupported cryptocurrencies on Voyager may not receive those specific cryptocurrencies back as part of the repayment process. Instead, Voyager plans to refund customers in the stablecoin USDC for unsupported cryptocurrencies and Voyager's proprietary VGX token deposits. This ensures that customers still receive the equivalent value of their deposits, albeit in a different form.

What Crypto Accounts Can I Send My Voyager Funds to? 

You have the flexibility to send your Voyager funds to various crypto accounts based on your preferences and needs. Some common options include:

• Another crypto exchange: You can transfer your Voyager funds to another crypto exchange of your choice. Make sure the exchange supports the specific cryptocurrencies you wish to transfer.
• Self-custody wallet: You can transfer your funds to a self-custody wallet, which provides you with complete control over your private keys and enhances security. Hardware wallets , such as Ledger or Trezor , or software wallets like MetaMask or Trust Wallet, are popular choices.
• Cold storage wallet: For maximum security, you can opt for cold storage wallets, which are offline devices or paper wallets specifically designed to store cryptocurrencies securely. Examples include hardware wallets or offline-generated paper wallets.

It's important to consider factors such as security, convenience and the specific cryptocurrencies supported when selecting the destination for your Voyager funds. Ensure that you are comfortable and well-informed about the chosen platform or wallet before initiating any transfers.

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Crypto broker Voyager Digital files for bankruptcy following the collapse of Three Arrows

Feeling the fallout.

By Emma Roth , a news writer who covers the streaming wars, consumer tech, crypto, social media, and much more. Previously, she was a writer and editor at MUO.

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Cryptocurrency broker Voyager Digital filed for bankruptcy on Tuesday in the wake of the collapse of the major crypto hedge fund Three Arrows Capital (3AC). Voyager’s Chapter 11 filing comes just days after 3AC filed for bankruptcy — and about a week after 3AC defaulted on a loan provided by Voyager.

In a press release , Voyager Digital states that it has about $1.3 billion worth of crypto assets on the platform, $110 million in cash and crypto assets on hand, and the $350 million it holds in an FBO (For-Benefit-Of) account for customers. It also says 3AC still owes more than $650 million.

Voyager CEO Stephen Ehrlich blames the company’s financial struggles on “the prolonged volatility and contagion in the crypto markets” as well as 3AC’s failure to repay its debt. “The chapter 11 process provides an efficient and equitable mechanism to maximize recovery,” Ehrlich added.

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Companies like Voyager Digital use a Chapter 11 filing when they plan on reorganizing their debts while still remaining operational. Voyager Digital outlined a proposed course of action in its press release, stating it will give customers “a combination” of the crypto held in their accounts, the recovered funds from 3AC, company shares, and Voyager tokens (which are currently worth about 21 cents each ). The company says customers who currently have USD deposits in their accounts will only regain access “after reconciliation and fraud prevention process is completed with Metropolitan Commercial Bank.” This plan still needs to be approved by the court.

Voyager paused all trading, withdrawals, and deposits last week after announcing that 3AC failed to repay its loan. In June, Sam Bankman-Fried, the billionaire CEO of trading firms FTX and Alameda Research, extended a $500 million line of credit to Voyager in an attempt to help it cope with the uncertain market. Bankman-Fried’s Alameda Research also invested $75 million in Voyager last year, which the Chapter 11 filing lists as the company’s largest unsecured claim.

The crypto crash is showing just how intertwined crypto firms really are, with the temporary shutdown of crypto lenders Celsius and Babel Finance preceding Voyager and 3AC’s bankruptcy filings. Earlier this week, crypto lending and trading startup Vauld also suspended all transactions , but it seems we’re yet to see how far the fallout will reach.

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FTC Reaches Settlement with Crypto Company Voyager Digital; Charges Former Executive with Falsely Claiming Consumers’ Deposits Were Insured by FDIC

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The Federal Trade Commission announced a settlement with bankrupt crypto company Voyager that will permanently ban it from handling consumers’ assets and is filing suit against its former CEO, Stephen Ehrlich, for falsely claiming that customers’ accounts were insured by the Federal Deposit Insurance Corporation (FDIC) and were “safe,” even as the company was approaching an eventual bankruptcy. The complaint also names Stephen Ehrlich’s wife, Francine Ehrlich, as a relief defendant.

In the federal court complaint , the FTC charges that from at least 2018 until it declared bankruptcy in July 2022, Voyager used promises that consumers’ deposits would be “safe” to entice them to hand over their funds. When the company failed, consumers lost access to significant assets they had saved, including ongoing salary deposits, college tuition funds, and down payments for homes, according to the complaint, which notes that consumers were locked out of their cash accounts for more than a month and lost more than $1 billion in crypto assets.

“Consumers reported over $1.4 billion in losses to cryptocurrency scams in the last year, and the FTC continues to crack down on those who lie to consumers about these risky assets,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “This action reminds companies and individuals: don’t play fast and loose with claims about FDIC insurance.”

The proposed settlement  with Voyager and its affiliates will permanently ban the companies from offering, marketing, or promoting any product or service that could be used to deposit, exchange, invest, or withdraw any assets. The companies also agreed to a judgment of $1.65 billion, which will be suspended to permit Voyager to return its remaining assets to consumers in the bankruptcy proceedings. Former executive Stephen Ehrlich has not agreed to a settlement and the FTC’s case against him will proceed in federal court. 

According to the complaint, Voyager enticed consumers to deposit cash and cryptocurrency with the company based on assurances that their assets were especially safe on the platform. The company offered incentives to consumers who converted the cash they deposited into a cryptocurrency called USD Coin, a so-called “stablecoin” that claims to track the value of the U.S. dollar.

The company’s marketing included direct promises about the safety of consumers’ deposits. One example cited in the complaint included the line “YOUR USD IS FDIC INSURED”

Voyager, however, is not a bank or financial institution, and the deposits consumers made with Voyager were not eligible to be insured by the FDIC. The complaint notes that the FDIC does not insure crypto assets at all, and consumers’ cash deposits were actually placed in an account held by Voyager at a traditional bank that also issued debit cards on behalf of Voyager. Consumers’ cash was only protected if that bank itself failed, and their cryptocurrency wasn’t protected at all.

The complaint notes that Voyager was aware that the company’s claims could mislead consumers. The bank where Voyager deposited consumers’ funds contacted the company in 2021 saying the claims were “potentially misleading.” A bank representative went on to say that “a reasonable consumer could conclude that his USDC [USD Coin] held with Voyager is FDIC-insured.” While Voyager made some changes to its cardholder agreement, the complaint notes that the company continued its misleading advertisements. The company only removed the FDIC claims from its advertising after receiving a cease-and-desist letter from the FDIC.

Ehrlich himself, in a June 2022 letter to Voyager customers, reassured them of the company’s stability, claimed it was “well-capitalized and positioned to weather the bear market,” and said that consumers’ funds were “as safe with us as at a bank.”

Two weeks later, the company froze consumers’ access to their accounts.

The FTC staff complaint alleges that Voyager and Stephen Ehrlich violated the FTC Act’s prohibition on deceptive practices and the Gramm-Leach-Bliley Act’s prohibition on obtaining a customer’s financial information through false, fictitious, or fraudulent statements.  The complaint also alleges that Stephen Ehrlich transferred millions of dollars to his wife Francine, including funds that can be traced directly to the alleged unlawful conduct.

In addition to banning Voyager and its affiliated companies from handling consumers’ assets, the proposed settlement prohibits the companies from misrepresenting the benefits of any product or service; from making false, fictitious, or fraudulent representations to any customer of a financial institution in order to obtain or attempt to obtain their financial information; and from disclosing nonpublic personal information about consumers without their express consent.

The Commission voted 3-0 to file a complaint against Voyager and its affiliated companies, Stephen Ehrlich, and relief defendant Francine Ehrlich and to approve a stipulated order with Voyager and its affiliated companies. The complaint was filed in the U.S. District Court for the Southern District of New York.

In a parallel action, on October 12, the Commodity Futures Trading Commission separately charged Ehrlich with fraud and registration failures.

NOTE: The Commission authorizes the filing of a complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. Stipulated orders have the force of law when approved and signed by the District Court judge.

The staff attorneys on this matter are Quinn Martin, Sanya Shahrasbi, and Larkin Turner of the FTC’s Bureau of Consumer Protection.

The Federal Trade Commission works to promote competition and protect and educate consumers .  The FTC will never demand money, make threats, tell you to transfer money, or promise you a prize. Learn more about consumer topics at consumer.ftc.gov , or report fraud, scams, and bad business practices at  ReportFraud.ftc.gov . Follow the FTC on social media , read consumer alerts and the business blog , and sign up to get the latest FTC news and alerts .

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Gemini customers get back over $2 billion in crypto from Genesis bankruptcy

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I quit my director job at Goldman Sachs to start my own company. There's always a cap if you're an employee.

• Hong Yea spent 10 years as a trader but always had dreams of starting his own business.
• Yea quit his director job at Goldman Sachs to start a crypto company, just as the industry tanked.
• He had doubts, alongside everyone else, but a Korean proverb spurred him to pursue his startup.

This as-told-to essay is based on a conversation with Hong Yea, a 36-year-old CEO and cofounder of GRVT. It has been edited for length and clarity.

In 2018, after five years of working in security lending at Credit Suisse, I started pondering what I wanted to do with my life. I was 30, living in Hong Kong. Did I want to keep working as a trader or do something completely different?

Around that time, a Goldman Sachs recruiter in Hong Kong approached me to work for them. After an interview, they offered me a job. I wasn't convinced I wanted to stay in banking, so I declined.

I took a two-week trip to Canada to meet with a good friend who worked at Amazon. If I was going to leave trading and start something new, I needed to be convinced by an idea or industry I could immerse myself in.

After two weeks of brainstorming with my friend, I didn't love anything we came up with. Luckily, Goldman hadn't filled the role, so I started working for them in November 2018.

Working at Goldman Sachs would always be limiting

I liked working as a trader at Goldman, but it wasn't fulfilling. I had this passion to start a business I couldn't let go of.

I worked at Goldman from November 2018 to July 2022. During that time, I started several side projects, including a restaurant and a home import service. I slowly realized that working for Goldman or any company, the end goal is limited to possibly being a partner. There's a cap.

I was promoted to executive director in 2019. The next step at the firm was managing director, a role with significantly more responsibility and compensation. I knew I'd struggle to walk away from my team and the money.

If I wanted to build something of my own, I needed to leave before reaching that point.

The 3 essentials for leaving my job

By 2020, I was seriously considering leaving my job to start my own business. But before I went out alone, I needed my new venture to be positioned in a fast-growing industry, have a business idea I knew I could contribute to and excel at, and have good co-founders to help me run the business.

I started researching crypto and blockchain in 2021. I'd invested in crypto since 2018 but wasn't that into it. But in 2021, the market was booming. I looked at the technology more closely, and it seemed applicable to the financial systems I was familiar with.

I booked a ticket to a crypto conference in February 2022 in Barcelona to learn more. The conference convinced me this was the industry to be in. There were many "crypto natives" there, but I saw a lack of traditional finance expertise. It felt like was a big opportunity for me to get in early.

When I got home, I spoke with two friends, Matthew and Aaron. Matthew was a trustworthy friend with a strong blockchain background. He'd introduced Aron to me as the best engineer he knew. I suggested we look into the decentralized finance space and see what improvements we could make, and they were on board.

I had all three requirements I'd set out to leave Goldman.

We started a crypto company weeks before the crash

By April 2022, we all decided to quit our jobs and dive full time into creating GRVT (pronounced gravity).

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GRVT would be a self-custodial cryptocurrency exchange designed to give users complete control over their assets. Basically, it would be a system to create more secure crypto trading and protect investors from third parties defaulting on their payments.

I had enough savings to cover my rent and living expenses for a year and other non-cash assets that I could leverage if needed.

For me, it didn't matter how much I'd saved. The key was having a team and project I felt confident could raise sufficient funds. Now we had that. There was no turning back.

I was working from Singapore in early May 2022. I emailed my boss in Hong Kong to say I was resigning. When I followed up on the phone with him, he said he was coming to Singapore a week later and wanted to talk with me in person.

At the same time all this was happening, Luna Crypto, followed by the crypto market, crashed.

The crypto industry had been decimated, and I'd lost around two-thirds of my savings in cryptocurrency. I couldn't help questioning my decisions. It was a really fragile time in my life.

When I told my parents and friends I had resigned from Goldman to start a career in the cryptocurrency industry, they were concerned. Many people asked why I'd leave Goldman for crypto during a crash.

"It is the best time to build when things are crashing as long as you have the conviction that industry will grow because it's the time when the fewest others will be building," I said in response to their worried questioning.

A Korean proverb inspired me to stick to my guns

My boss flew into Singapore and met with me. "Are you sure you don't want to come back," he asked me, half serious, half joking.

But after talking to my fiancé, I decided to stick with my plan. She reminded me of a Korean proverb: "If you've drawn your sword, you need to slay something before you put it back." I'd been careful and made all the right assessments. Even if the markets were tanking, I was committed.

In the following months, we focused on building and getting investor funding. It was the worst time to raise because no one was looking to crypto. It was daunting, and stressful, and required a lot of self-convincing.

In October 2022, we pivoted away from lending toward building a safer hybrid trading platform: a crypto derivatives exchange. That's when we started receiving our first proper investments.

It felt like the industry was entering a no-return stage after FTX

When FTX filed for bankruptcy in November 2022, it confirmed that we were building something the industry needed.

If you trust your funds to an exchange, they have full control over their management. GRVT solves that problem. User funds are never controlled by a third party. You always have control of the funds in your own wallet and trade through your own wallet.

After the FTX crash, there were moments when I thought the industry was entering a no-return stage because the sentiment was so negative.

The technology we believed in — blockchain and smart contract-based risk management — could be the answer to preventing future incidents like this. That conviction kept us going through the toughest times.

Since the FTX crash, things have gone up for us

We've raised about $9.3 million, which is pretty decent for seed rounds at the worst time. We're a team of 26 building what I think is the future of exchanges. We're looking to launch in the next two months. Over 2 million people are registered on our waiting list, and we have 500,000 followers on X .

Achieving these milestones step by step is exciting for myself and the team, even if we've built it through the worst times.

I wanted to dream up something big enough that when I fulfilled it, it felt so much better than working for a company. We weathered the storm, and it feels incredibly rewarding.

Watch: Microsoft CEO unravels ChatGPT, ethical AI, and going bust

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Bankruptcy judge approves Genesis Global plan to refund $3 billion to creditors, crypto customers

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ALBANY, N.Y. (AP) — A bankruptcy court judge has approved a plan by the cryptocurrency lender Genesis Global to return about $3 billion to its creditors and investors, including thousands of people who New York regulators say were defrauded by the company.

The plan and settlement approved Friday by Judge Sean H. Lane includes up to $2 billion to settle a lawsuit by New York Attorney General Letitia James, who said the company misled investors about the risks of putting their money into a company program known as Gemini Earn.

“This historic settlement is a major step toward ensuring the victims who invested in Genesis have a semblance of justice,” James said in a statement Monday. “Once again, we see the real-world consequences and detrimental losses that can happen because of a lack of oversight and regulation within the cryptocurrency industry.”

Creditors whose claims were in U.S. dollars will be receiving 100% of their loan balances by the firm, which filed for bankruptcy last year. Those with claims in cryptocurrency will see some short of shortfall, according to the decision.

The settlement includes a victim fund for Genesis’ creditors to help recover some of their losses, James’ office said.

“We look forward to putting the Plan into effect and making distributions as expeditiously as possible,” Genesis Interim CEO Derar Islim said in a statement on Friday.

Gemini ensures full return on crypto loans

• By Howie Jones
• Last updated May 31, 2024

Winklevoss twins’ owned cryptocurrency exchange Gemini has announced that its Gemini Earn customers will likely recover around $2.18 billion in cryptocurrency, implying a full return on their crypto loans. This assurance should bring relief to those worried about their investments.

Despite the volatility of the crypto market, this announcement reinstates faith in the possibility of full returns on crypto loans. Gemini’s quick response to the concern surrounding their potential lapse aids in the restoration of investors’ faith.

Genesis Global Capital, LLC, the recipient of these loans, is struggling with bankruptcy. The company received loans when the Gemini Earn program launched, which offered an appealing yield but failed to attract enough investors to maintain liquidity. Discussions around possible courses of action, including potential bankruptcy protection, are ongoing.

One year after the lending scheme, Gemini Earn users are expected to receive over $2 billion back from their initial contributions.

Assured full recovery on Gemini crypto loans

Gemini reported a big recovery rate since stopping withdrawals, and the progress thus far has been praised.

Following a financial downfall sparked by the collapse of crypto hedge fund Three Arrows Capital and crypto exchange FTX in 2022, Genesis Global Holdco declared bankruptcy. Gemini Earn users can expect the return of their assets over the next year thanks to the efforts of court-appointed trustee administrators. While this process is gradual, it ensures users are reimbursed in full.

Both Gemini and Genesis have grappled with multiple lawsuits over the past year, including a significant one filed by the U.S. Securities and Exchange Commission accusing the Gemini Earn Program of unauthorized security offers and sales. Despite defending themselves rigorously, these lawsuits have affected their reputations and operations.

Additionally, Gemini agreed to a settlement in a lawsuit initiated by the New York State Department of Financial Services. The settlement included a $37 million penalty and an agreement to return $1.1 billion to Gemini’s customers. Gemini was criticized for its lackadaisical vetting and monitoring processes regarding Genesis Global Capital.

Howie Jones

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Gemini crypto exchange to return $2.18B to defrauded investors after New York settlement

May 29 (UPI) -- Gemini crypto exchange said Wednesday that following a settlement with the New York Attorney General's office, $2.18 billion will be returned to defrauded users of the company's Earn program.

"This represents an unprecedented recovery among crypto bankruptcies, as well as bankruptcies in general, and follows our previous announcement that we reached a settlement in principle with Genesis and other creditors in the Genesis Bankruptcy, which will result in all Earn users receiving 100% of their digital assets back in kind," Gemini said in a statement .

Attorney General Letitia James secured the settlement last week with the bankrupt Genesis Global Capital. The returned money goes to 29,000 investors in the Gemini Earn program who were falsely led to believe the investment was low risk.

According to Gemini, the settlement represents 97% of the digital assets owed to Earn users, $1 billion more than when Genesis halted withdrawals. Gemini said that represents a 232% recovery.

The company said users can expect to get their "remaining asset balance" within the next 12 months.

"It's important to note that the Genesis bankruptcy was not a crypto problem. It was old-fashioned financial fraud compounded by a lack of regulatory clarity. To that end, we will continue to fight for clear rules and guidance for our industry that foster both innovation and consumer protection. And we will win this fight. The future is bright," Gemini said.

The Earn program was started in 2021, claiming customer investors could get high returns on bitcoin.

Gemini used the money invested to lend crypto to institutional borrowers. That was done through Genesis Global Capital.

The Genesis bankruptcy forced Gemini to stop withdrawals from the Earn program.

James then acted to help make defrauded investors whole.

The attorney general lawsuit found internal financials were risky and asserted that Gemini knew that the Genesis loans were unsecured "and at one point highly concentrated with one entity, Sam Bankman-Fried's Alameda, but did not reveal this information to investors."