In the latest cryptocurrency crackdown, New York attorney general Letitia James said on Thursday (Oct. 19) that her office has sued Gemini Trust, Genesis Global, and Digital Currency Group (DCG) for defrauding some 230,000 investors of more than $1 billion.
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The office accused Gemini of lying about an investment program called Gemini Earn, which was run in partnership with Genesis. Investors who loaned their crypto assets were promised up to 8% in interest. Despite the company’s internal reports showing risky financials, Gemini has repeatedly assured investors that investing in the program was a “low-risk investment.”
The New York suit is a follow up on the US Securities and Exchange Commission action against the same companies in January, saying it constituted an unregistered securities offering.
Genesis’s former CEO Soichiro Moro and DCG’s CEO Barry Silbert are also named in the lawsuit which accuses them of attempting to conceal more than $1.1 billion in losses.
“These cryptocurrency companies lied to investors and tried to hide more than a billion dollars in losses, and it was middle-class investors who suffered as a result,” said attorney general James.