New York Attorney General Letitia James sues Gemini, Genesis, and DCG for $1B+ investor fraud.
Gemini and Genesis accused of misleading investors about risky loans.
Lawsuit seeks restitution for defrauded investors.
On Thursday, Letitia James, the Attorney General of New York, filed a lawsuit against Gemini Trust, Genesis Global, and Digital Currency Group (DCG). The lawsuit claims that these entities defrauded over 230,000 investors, resulting in losses exceeding $1 billion.
This legal action also implicates former Genesis CEO Soichiro “Michael” Moro and DCG founder and chief, Barry Silbert, for allegedly hiding the true financial state of their lending unit, Genesis, from Gemini exchange, its customers, and the public.
Were Investors Misled?
The lawsuit alleges that Genesis lent significant amounts to various companies. When these companies later faced financial difficulties, Genesis incurred substantial losses. In response, Gemini is accused of trying to hide these losses by promising to pay them later.
Letitia James claims that both Gemini and Genesis misled their customers by presenting their investment program as secure and trustworthy. However, the lawsuit asserts that the firms failed to disclose their high concentration of loans with Alameda. It also accuses other executives of hiding a massive $1.1 billion loss.
Also Read: Gemini Earn Controversy: $282M Belongs to Users, Platform Claims
This Seems Familiar, Doesn’t It?
The concerns raised against Gemini, Genesis, and DCG are similar to those surrounding another insolvent exchange, FTX, and its affiliated company, Alameda. These concerns include acquiring significant loans while not adequately managing associated risks and maintaining a veil of secrecy around their financial dealings.
Read More: FTX Customers to Receive Over 90% of Assets Back by Mid-2024! Here’s How
The lawsuit seeks to provide restitution for investors who were allegedly deceived and to require the return of any gains obtained through deceitful practices.
The allegations against Gemini, Genesis, and DCG are serious. Do you think they’ll be able to regain the trust of investors?
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