New York AG Files Lawsuit Against Gemini, Genesis, and DCG, Accusing Them of Defrauding Investors of 1 Billion Dollars

Crypto News– On Thursday, New York Attorney General Letitia James initiated legal action by filing a lawsuit against cryptocurrency firms Gemini Trust, Genesis Global Capital, and Digital Currency Group (DCG). The suit alleges that these companies defrauded over 230,000 investors, including at least 29,000 individuals from New York, of more than $1 billion.

New York AG Files Lawsuit Against Gemini, Genesis, and DCG, Accusing Them of Defrauding Investors of 1 Billion Dollars

Attorney General James is seeking to impose a ban on Gemini, Genesis, and DCG from operating within the financial investment industry in New York.

The lawsuit points out that Gemini extended loans to Genesis, a subsidiary of DCG, as part of its Earn program. These funds were subsequently loaned to counterparties like trading firms Three Arrows Capital and Alameda Research, which eventually faced financial collapse. This resulted in Genesis accumulating a substantial $1.1 billion deficit. It’s noteworthy that DCG also holds ownership of CoinDesk.

In a statement, it was emphasized that “Today’s lawsuit is the latest action taken by Attorney General James to regulate the cryptocurrency industry and safeguard the interests of investors.” The statement referred to her recent legal actions against cryptocurrency entities such as CoinEx, KuCoin, and Celsius founder Alex Mashinsky.

This lawsuit also follows the federal Department of Justice’s cases against Mashinsky and FTX founder Sam Bankman-Fried, both of whom have pleaded not guilty. Additionally, the Securities and Exchange Commission has initiated legal actions against major cryptocurrency exchanges like Coinbase and Binance.