New York’s attorney general has filed a lawsuit against cryptocurrency firms Gemini, Genesis and Digital Currency Group (DCG) for allegedly defrauding investors through the Gemini Earn investment program.
An official statement from the office of Attorney General Letitia James outlines the basis of the charges, claiming that the companies defrauded more than 23,000 investors, including 29,000 New York citizens, of more than $1 billion.
An investigation carried out by James’ office claims that Gemini lied to investors about its Gemini Earn investment program, which it ran in partnership with Genesis. It claims that, while Gemini had assured investors that the program was a low-risk investment, investigations reveal that Genesis’ financials “were risky”:
“The lawsuit alleges that Gemini knew Genesis’ loans were undersecured and at one point highly concentrated with one entity, Sam Bankman-Fried’s Alameda, but did not reveal this information to investors.”
The lawsuit also charges Genesis, as well as its former CEO Soichiro Moro, parent company DCG and its CEO, Barry Silbert, with defrauding investors by attempting to conceal more than $1.1 billion in losses.
Related: Genesis announces winding down of crypto trading services
The lawsuit…
