New York Attorney General Sues Crypto Firms Gemini, Genesis, DCG for Over $1 Billion Fraud
Summary:
New York Attorney General Letitia James has filed a lawsuit against cryptocurrency firms Gemini, Genesis, and Digital Currency Group for allegedly defrauding investors of over $1 billion through the Gemini Earn investment program. James claims that Gemini misled investors about the risky nature of their program and Genesis’ financials. Furthermore, Gemini, Genesis, their parent company DCG, and related CEOs are accused of concealing over $1.1 billion in losses. The lawsuit aims to ban these firms from operating within New York's financial investment sector and seeks restitution for lost investments.
The Attorney General of New York, Letitia James, has instigated legal proceedings against crypto enterprises Gemini, Genesis, and Digital Currency Group (DCG). The lawsuit pertains to accusations of investor deception through the Gemini Earn investment scheme. James' official statement explicates the basis of the allegations, asserting these firms wrongfully tricked over 23,000 clients, including around 29,000 New Yorkers, leading to losses surpassing $1 billion.
Following an audit executed by James’ team, it was declared that Gemini made false promises to its investors about their Gemini Earn investment program, operated in conjunction with Genesis. Despite Gemini's assurances indicating that the program represented a low hazard venture, the investigation has exposed financial practices at Genesis classified as 'risky'.
The legal action further advances the claim that Gemini was aware that Genesis' loans were lacking sufficient security and were excessively concentrated on a single entity - Sam Bankman-Fried’s Alameda. However, this consequential information was not disclosed to its investors.
Moreover, the litigation accuses Genesis, its previous chief executive, Soichiro Moro, parent company DCG, and its CEO Barry Silbert, of defrauding investors. The alleged fraudulent activity involved the concealment of more than $1.1 billion in losses from investors.
The lawsuit aims to restrict Gemini, Genesis, and DCG from conducting any further business activities within the financial investment sector in New York. It also seeks compensation for the misappropriated investment and the return of any unscrupulous gains.
The Attorney General's discourse emphasized the fallout endured by ‘hard-working, middle-class investors’ who suffered losses in excess of a billion dollars due to 'blatant lies' about the safety and growth potential of investing in Gemini Earn. James argued that Gemini suppressed the inherent risks associated with investing in Genesis while the accompanying enterprise actively deceived the public concerning its losses. In her condemnation of the industry, she cited this malpractice as a reflection of harmful behavior pervasive in the loosely regulated cryptocurrency industry.
Published At
10/19/2023 11:49:44 AM
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