NY Attorney General sues crypto firms Gemini, DCG, Genesis for 'fraud'
Letitia James on Thursday sued cryptocurrency firms Genesis Global, its parent company Digital Currency Group (DCG) and Gemini for allegedly «defrauding» investors of more than $1 billion.
The development underscores the challenges the crypto industry continues to face almost a year after the bankruptcy of Sam Bankman-Fried's exchange FTX, which led to a meltdown in the sector that overwhelmed several major firms.
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At the heart of the lawsuit is a program that Gemini ran in partnership with Genesis, dubbed «Gemini Earn». The program allowed customers to lend crypto assets such as bitcoin to Genesis.
Gemini, run by the Winklevoss twins best known for their legal battle against Meta Platforms' Mark Zuckerberg, had billed the program as a «low-risk investment» even when its internal analyses had found Genesis was on risky financial footing, James alleged.
Gemini knew Genesis' loans were undersecured and at one point highly concentrated with one entity, Bankman-Fried's crypto hedge fund Alameda that later went belly up, James said.
Gemini did not reveal any of this information to the investors of Gemini Earn, she added.
Gemini posted on messaging platform X, formerly known as Twitter, that the lawsuit «confirms what we've been
