New York Attorney General sues Gemini, Genesis, DGC for allegedly defrauding investors
New York’s attorney general has filed a lawsuit against cryptocurrency firms Gemini, Genesis and Digital Currency Group for allegedly defrauding investors through the Gemini Earn investment program.
An official statement from the office of attorney general Letitia James outlines the basis of the charges, claiming that the companies defrauded more than 23,000 investors, including 29,000 New York citizens of more than $1 billion.
An investigation carried out by James’ office claims that Gemini lied to investors about its Gemini Earn investment program which it ran in partnership with Genesis. It claims that while Gemini had assured investors that the program was a low-risk investment, investigations reveal that Genesis’ financials “were risky”:
“The lawsuit alleges that Gemini knew Genesis’ loans were undersecured and at one point highly concentrated with one entity, Sam Bankman-Fried’s Alameda, but did not reveal this information to investors.”
The lawsuit also charges Genesis as well as its former CEO Soichiro Moro, parent company DCG and its CEO Barry Silbert with defrauding investors by attempting to conceal more than $1.1 billion in losses.
Related: Genesis announces winding down of crypto trading services
The lawsuit looks to ban Gemini, Genesis and DCG from operating in the financial investment industry in New York as well as seeking restitution for investment and the return of “ill-gotten gains”.
A statement from the New York attorney general highlighted the losses suffered by “middle-class investors”:
“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.
James added that Gemini hid the risks of investing with Genesis, while the company lied to the public about its losses. She also took aim at the wider cryptocurrency industry, describing the fraud as “another example of bad actors causing harm throughout the under-regulated cryptocurrency industry.”
Magazine: Blockchain detectives: Mt. Gox collapse saw birth of Chainalysis
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
Former SEC Chairman Gary Gensler Found a New Job! Will His View on Cryptocurrencies Change?
Former SEC Chairman Gary Gensler is returning to MIT as a professor of the practice, FOX Business correspondent Eleanor Terrett reports.
Top Analyst Blames Ripple CEO, Claims XRP Is Not Suitable For US! Here's Why…
Willy Woo claimed that XRP is not suitable for a strategic reserve, especially in the US.
JUST IN! Donald Trump's Company Announces $250 Million Investment! There Are Cryptocurrencies Too!
Trump's company, Trump Media Group, will invest $250 million in SMAs, ETFs and cryptocurrencies.
What’s the Latest on Ethereum? Are the Bulls in? Analyst Explains the Latest Situation
What is the latest situation in the world's largest altcoin, Ethereum? Have whale cryptocurrency investors finally gotten in?