NY AG Files $1B Suit Against Gemini, Genesis for Fraud Allegations

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New York Attorney General Letitia James has filed a lawsuit against Gemini, Genesis Digital Currency Group (DCG) on Thursday, alleging that the crypto firms have lied to investors and concealed losses of more than $1 billion. According to the prosecutor, 230,000 investors, including 29,000 from New York, have been defrauded.

The companies committed the fraud scheme by hiding losses and lying repeatedly to investors. In December last year, Gemini halted withdrawals and the impact on customers was significant.

The AG filed the lawsuit on Thursday, which claims that the crypto companies have defrauded investors of more than $1.1 billion. James said: “These cryptocurrency companies lied to investors and tried to hide more than a billion dollars in losses, and it was middle-class investors who suffered as a result. My office will continue our efforts to stop deceptive cryptocurrency companies and to push for stronger regulations to protect all investors.”

The lawsuit is the latest in the New York AG’s crackdown on crypto firms, which includes recent actions against CoinEx, Coin Café, KuCoin, and Nexo. Barry Silbert, CEO of DCG, has also been charged in the lawsuit.

Gemini has assured customers repeatedly that its Earn program is a low-risk option, despite its own analysis showing that Genesis’ loans were not only undersecured but also “highly concentrated with one entity, Sam Bankman-Fried’s Alameda.” Similarly, Genesis’ former CEO, Soichiro Moro, is accused of withholding information about investments from investors.

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