Gemini, Genesis, DCG Accused in $1.1B Lawsuit Fraud Claims

New York City, October 20, 2023: New York Attorney General Letitia James today filed a lawsuit against cryptocurrency companies Gemini Trust Company, Genesis Global Capital, and Digital Currency Group (DCG) for allegedly defrauding more than 230,000 investors of more than $1 billion.¹

The lawsuit alleges that Gemini lied to investors about an investment program it ran with Genesis called Gemini Earn. The program promised investors high-yield returns on their cryptocurrency deposits, but Gemini failed to disclose the risks involved, including the fact that Genesis was lending the funds to risky borrowers.

The lawsuit also alleges that Genesis and DCG tried to conceal more than $1.1 billion in losses from investors, Gemini, and the public. Genesis is a subsidiary of DCG, and the two companies are controlled by Barry Silbert.²

The lawsuit seeks to ban Gemini, Genesis, and DCG from the financial investment industry in New York and to obtain restitution for investors. It also seeks to disgorge ill-gotten gains from the companies and their executives.

Gemini and DCG have denied the allegations in the lawsuit. Genesis filed for bankruptcy in January, and Gemini previously sued DCG over the Gemini Earn program.

The lawsuit is the latest in a series of regulatory crackdowns on the cryptocurrency industry. The Securities and Exchange Commission (SEC) has also filed lawsuits against Gemini and Genesis, alleging that the Gemini Earn program was an unregistered securities offering. ³

The lawsuit is also a sign that regulators are paying close attention to the cryptocurrency industry, which has been plagued by fraud and scams. The lawsuit comes at a time when the cryptocurrency market is in turmoil, with prices for Bitcoin and other cryptocurrencies falling sharply.

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