New York Attorney General Sues Gemini, Genesis, DCG for defrauding investors

New York's attorney general has filed charges against cryptocurrency companies Gemini, Genesis and Digital Currency Group (DCG) for defrauding investors in the Gemini Earnings investment program.

An official statement from Attorney General Leticia James' office outlines the allegations, alleging the companies defrauded more than $1 billion from more than 23,000 investors, including 29,000 New Yorkers.

An investigation by James' office alleges that Gemini lied to investors about the Gemini Income Investment Program, which it partnered with Genesen. Although Gemini assured investors that the program was a low-risk investment, Genesis Financial was “risky,” according to research:

The lawsuit alleges that Gemini knew the Genesis loans were unsecured and at one point pooled with an entity, Sam Bankman-Fried Alameda, but failed to disclose this information to investors.

The lawsuit also accuses Genesis and its former CEO, Soichiro Moro, of parent company DCG. And CEO Barry Silbert was charged with defrauding investors by trying to hide more than $1.1 billion in losses.

Related: Genesis Announces Downsizing of Crypto Trading Services

The suit seems to prohibit Gemini, Genesis and DCG from working in financial investment in New York, as well as for the return of investment and the return of “improper profits”.

A statement from the New York attorney general highlighted the losses suffered by “mid-tier investors”:

“Diligent New Yorkers and investors across the country lost more than a billion dollars because they were fed a blatant lie that their money was safe and would grow if they invested in Gemini Income.”

James added that Gemini hid his concerns about investing with Genesis, saying the company lied to the public about its losses. She also took aim at the broader cryptocurrency industry, describing the scam as “another example of bad actors causing harm in the unregulated cryptocurrency industry.”

Genesen and Gemini were previously charged with offering unregistered securities under the Earn program in January 2023 from the United States Securities and Exchange Commission.

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