New York AG Sues Gemini Trust and Digital Currency Group

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The New York Attorney General, Letitia James, has filed a lawsuit against cryptocurrency firms Gemini, Genesis Global Capital, and its parent company, Digital Currency Group (DCG), alleging fraud and defrauding investors of over $1 billion.

New York AG Alleges Fraud

According to reports by Fox Business, Letitia James has initiated legal action against Gemini, Genesis Global Capital, and DCG, along with former Genesis CEO Soichiro Moro and DCG CEO Barry Silbert. The lawsuit claims that these firms deceived investors by stating their investments were safe under the Gemini Earn program. However, the New York AG alleges that Genesis’ loans were actually risky due to their association with Sam-Bankman Fried’s crypto empire.

James further alleges that the companies attempted to hide over $1.1 billion in losses, leading to significant financial harm for investors.

James Seeks Restitutions and a Ban

AG James stated, “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, emphasizing the alleged conspiracy to defraud Gemini Earn users and other Genesis creditors.

Furthermore, the Attorney General is seeking restitution from the crypto firms and a ban on their operations in New York, with the aim of protecting all investors and pushing for stronger regulations in the under-regulated cryptocurrency industry.

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DCG denies the allegations, asserting that they have always conducted business lawfully and with integrity. They claim to have cooperated with the Attorney General’s investigation and state that there is no evidence of wrongdoing by DCG, Barry Silbert, or their employees.

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