New York AG indicts Gemini, Genesis in $1 billion fraud
New York Attorney General Leticia James on Thursday filed charges against Gemini, Genesis and DCG. The crypto firms allegedly lied to investors and hid more than $1 billion in losses.
New York Attorney General Leticia James has filed charges against Gimini, Genesis Global Capital and Digital Currency Group for defrauding more than 230,000 investors, including 29,000 from New York.
Crypto companies lied to investors
According to the AG's indictment on Thursday, the companies committed more than $1.1 billion in fraud by hiding losses and repeatedly lying to investors. Gemini Irene customers were impacted when Genesis discontinued the product in December last year.
I am suing cryptocurrency companies @Gemini, @GenesisTrading and @DCGco for defrauding 230,000 investors of over $1 billion. This is another example of the disadvantages of an unregulated crypto industry.
— NY AG James (@NewYorkStateAG) October 19, 2023
According to New York's top attorney, Gemini's own analysis showed that Genesis Loans was not only unsecured but was “partially linked to Sam Bankman-Fried Alameda,” but the company failed to warn its customers. Instead, the crypto exchange assures its clients that the income program is a low-risk investment.
Withholding the information from investors extends to Genesis and its former CEO, Soichiro Moro. Genesis' parent company, which has recently been embroiled in a spat with Gemini over customer money, is also involved in the lawsuit. The suit also charges DCG CEO Barry Silbert.
“These cryptocurrency companies lied to investors and tried to hide more than a billion dollars in losses, and it's the middle-class investors who have suffered because of it,” James said. she added.
“My office will continue our efforts to stop fraudulent cryptocurrency companies and push for stronger regulations to protect all investors.”
The lawsuit against the three companies is the New York Ag's latest crackdown on crypto companies. Some recent actions have been on crypto platform CoinEx, Coin Café, KuCoin and Nexo.
