Key Points:
- The New York Attorney General sues Gemini, Genesis, and DCG for a $1 billion crypto fraud scheme.
- Allegations include hiding losses and misleading investors.
- The lawsuit seeks penalties and restitution for defrauded investors.
In a continued crackdown on cryptocurrency companies, New York Attorney General Letitia James has filed a lawsuit accusing three major players in the digital asset industry of fraudulent activities and concealing losses in a $1 billion scheme.
New York Attorney General Targets Crypto Giants in $1 Billion Fraud Lawsuit
The lawsuit targets Gemini Trust, run by the Winklevoss twins, as well as lender Genesis Capital, and Digital Currency Group (DCG), the parent company of Genesis.
The lawsuit alleges that these companies defrauded more than 230,000 investors, including over 29,000 New Yorkers. The Attorney General seeks to ban Gemini, Genesis, and DCG from the financial investment industry in New York.
Genesis, its former CEO Soichiro Moro, and DCG’s CEO Barry Silbert are also charged with attempting to conceal over $1.1 billion in losses, facing potential penalties and the demand for the return of ill-gotten gains.
Crypto Firms Accused of Deception and Concealing Losses
The New York Attorney General criticized Gemini for hiding investment risks with Genesis and lying to the public about its losses. She also pointed out the broader issue of bad actors causing harm in the under-regulated cryptocurrency industry.
The lawsuit reveals that Gemini lent funds to Genesis as part of its Earn program, which was later lent to entities such as trading firms Three Arrows Capital and Alameda Research, both of which went bankrupt. Gemini allegedly knew about these unsecured loans but failed to disclose this information to investors.
Investors were impacted by the actions of these three firms, with Gemini being accused of misleading investors about its investment program, Gemini Earn, by falsely claiming it was a “low-risk investment.” The lawsuit seeks to hold the companies accountable for their actions and prevent their continued operations in the financial investment industry in New York.
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Source: https://coincu.com/224347-new-york-attorney-general-sues-gemini/