New York Attorney General Letitia James filed a lawsuit Thursday against Gemini Trust, Genesis Global Capital and Digital Currency Group (DCG), for allegedly defrauding more than 230,000 investors including at least 29,000 New York residents, of more than US$1 billion.

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Fast Facts

  • An investigation by the Office of the Attorney General claims that Gemini lied to investors about its Gemini Earn investment program, which was operated with Genesis.
  • The lawsuit states that Gemini marketed Gemini Earn as a low-risk investment, despite knowing that Genesis’ loans were undersecured and risky.
  • According to the filing, nearly 60% of all outstanding loans from Genesis to third parties benefited Sam Bankman-Fried’s Alameda Research, the sister trading firm of the bankrupt FTX exchange.
  • The lawsuit also charges Genesis’ former Chief Executive Officer Soichiro Moro, its parent firm DCG and CEO Barry Silbert for defrauding investors by trying to conceal an over US$1.1 billion loss.
  • Attorney General James seeks to ban the companies from the financial investment industry in New York while seeking restitution for investors.
  • Genesis filed for Chapter 11 bankruptcy in the Southern District of New York on Jan. 19, with listed liabilities between US$1 billion to US$10 billion, with over 100,000 creditors.
  • Genesis suspended user withdrawals on Nov. 16, 2022, after the fall of FTX. The firm said it has US$175 million of its assets locked in the bankrupt exchange.

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