The alleged fraud involving Gemini Trust Co. and
The civil complaint was initially filed in October seeking $1.1 billion. But it’s been amended after additional DCG investors came forward to claim they’d been misled about the safety of their investments, New York Attorney General
The suit accuses Gemini, which operated a crypto exchange, and DCG’s Genesis Global Capital unit of failing to disclose to investors the risks of a crypto-lending program they started in 2021. The venture’s assets collapsed last year amid several high-flying bankruptcies, including
“The fraud and deceit were so expansive that many additional people have come forward to report similar harm,” James said Friday. “This illegal cryptocurrency scheme, and the horrific financial losses that real people have suffered, are yet another reminder of why stronger cryptocurrency regulations are needed to protect all investors.”
On Thursday, Genesis Global Holdco LLC settled with the state, which alleged the bankrupt crypto lender defrauded customers of its now-terminated Gemini Earn program, which was run jointly with Gemini Trust Co. The settlement still needs bankruptcy court approval.
‘Baseless Complaint’
“There is nothing new here,” DCG said in an emailed statement. “This is the same baseless complaint recirculated to generate another round of press headlines. We will fight the claims aggressively and we will win. DCG has always conducted its business lawfully and with integrity, and DCG and Barry Silbert will be fully vindicated.”
Silbert and Gemini didn’t immediately return requests for comment.
Gemini, founded by brothers
Gemini Earn purported to generate as much as 8% interest for Gemini customers by allowing Genesis to lend their cryptoassets to third parties. But more than $1 billion was invested in
Gemini previously applauded the complaint against Genesis and DCG, but said it disagree with the being added the complaint in October, saying it was “blaming a victim for being defrauded and lied to.”
(Updates with statement from DCG. An earlier version was corrected to show Moro was the former CEO of Genesis.)
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