New York Attorney General Letitia James filed suit against Gemini, Genesis Global Capital, and its parent group, DCG. James alleges these firms defrauded investors out of more than $1 billion.
New York AG Alleges Fraud
According to by Fox Business, Attorney General for New York, Letitia James, filed a lawsuit against crypto firms Gemini, Genesis Global Capital, and its parent firm Digital Currency Group (DCG). James further sued former Genesis CEO Soichiro Moro and Barry Silbert, CEO and founder of DCG.
James alleges the companies defrauded investors out of over $1 billion. The lawsuit further claims Gemini, founded by the Winklevoss twins, “lied to investors” by stating their investments were safe in the Gemini Earn program. Gemini Earn is a program Gemini operated with the now-bankrupt , which the SEC claims is a securities offering. The New York AG alleges Genesis’ loans were actually risky because they were at one point “highly concentrated” with Sam-Bankman Fried’s crypto empire
According to Attorney General James, Moro, Silbert, and the crypto companies deceived investors and the public by trying to hide over $1.1 billion in losses.
James Seeks Restitutions and a Ban
Fox reports AG James said in a statement:
“These cryptocurrency companies lied to investors and tried to hide more than a billion dollars in losses, and it was middle-class investors who suffered as a result.
Hardworking New Yorkers and investors around the country lost more than a billion dollars because they were fed blatant lies that their money would be safe and grow if they invested it in Gemini Earn. Instead, Gemini hid the risks of investing with Genesis and Genesis lied to the public about its losses.”
Gemini announced the lawsuit on social media platform X.
Today, the @NewYorkStateAG sued Genesis, its former CEO @michaelmoro, its parent company , and DCG’s CEO @BarrySilbert personally for conspiring to lie and defraud Gemini, Earn users, and other Genesis creditors. The NY AG’s lawsuit confirms what we’ve been saying all along…
— GeminiTrustCo (@GeminiTrustCo) October 19, 2023
The Attorney General said she is seeking restitution from the crypto firms and a ban on the firms from operating in New York.
According to the Strait Times, Ms James continued to say:
“My office will continue its efforts to stop deceptive cryptocurrency companies, and to push for stronger regulations to protect all investors.”
She further commented that the alleged fraud is “yet another example of bad actors causing harm throughout the under-regulated cryptocurrency industry.”
Meanwhile, DCG denied the claims made by Ms James and said it has always conducted business “lawfully and with integrity.”
“We have actively cooperated for months with the Attorney-General’s investigation in an open and transparent manner.
We were blindsided by the filing of the complaint, and there is no evidence of any wrongdoing by DCG, Barry Silbert, or its employees.”
