STRATEGIC PARTNERS
October 19, 2023
New York Attorney General Letitia James filed a lawsuit against Genesis Global and its parent Digital Currency Group and Gemini for defrauding investors of more than $1 billion. The lawsuit claims that Genesis and Gemini ran a program called Gemini Earn that they claimed was low risks, but the company itself was in bad financial shape, according to report by CoinDesk
The lawsuit claims that the companies defrauded more than 230,000 investors by not revealing that it was in the hole by $1.1 billion. This was caused when Gemini lent funds to Genesis, which then lent the funds to counterparties such as Three Arrows Capital and Alameda Research, which both went bankrupt. Alameda itself was the trading firm for Sam Bankman-Fried, the founder of collapsed exchange FTX. He was arrested late last year for fraud.
The attorney is seeking to stop "Gemini, Genesis, DCG, and its executives from engaging in any business related to the purchase and sale of securities and commodities within or from New York," according to a press release. It also aims to seek restitution of more than $1.1 billion in losses for investors.
"Today's lawsuit is the latest action taken by Attorney General James to rein in the cryptocurrency industry and protect investors," James' office said in a statement.
