April 19, 2024
Latest Cryptocurrency News

Gemini and Genesis Face Legal Action Over Alleged Cryptocurrency Investment Fraud

The attorney general of New York has initiated legal proceedings against cryptocurrency companies Gemini, Genesis, and Digital Currency Group (DCG), alleging that they engaged in fraudulent activities related to the Gemini Earn investment program.

In an official statement released by Attorney General Letitia James’ office, the charges are based on the assertion that these companies defrauded over 23,000 investors, including 29,000 residents of New York, resulting in losses exceeding $1 billion.

According to an investigation conducted by James’ office, it has been alleged that Gemini misled investors about the Gemini Earn investment program, which was operated in partnership with Genesis. The investigation revealed that despite Gemini’s assurances that the program was a low-risk investment, the financials of Genesis were considerably risky. The lawsuit asserts that Gemini was aware of the unsecured nature of Genesis’ loans and their significant concentration with a single entity, Sam Bankman-Fried’s Alameda, but this information was not disclosed to investors.

The legal action also targets Genesis, its former CEO Soichiro Moro, parent company DCG, and its CEO Barry Silbert, accusing them of attempting to conceal losses exceeding $1.1 billion and defrauding investors. The lawsuit aims to prevent Gemini, Genesis, and DCG from participating in the financial investment sector in New York while seeking restitution for affected investors and the recovery of gains acquired through fraudulent means.

The New York attorney general’s statement emphasized the losses incurred by middle-class investors, who were deceived with false promises of safety and growth from their investments in the Gemini Earn program.

Attorney General James contended that Gemini concealed the risks associated with investing in Genesis and disseminated false information about their losses. She also criticized the broader cryptocurrency industry, labeling this fraud as yet another instance of bad actors causing harm within the inadequately regulated cryptocurrency sector.

It’s worth noting that prior to this lawsuit, Genesis and Gemini were previously confronted with a legal action from the United States Securities and Exchange Commission in January 2023, alleging that they offered unregistered securities through the Earn program.

Image by freepik

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