New York Attorney General Letitia James has taken legal action against cryptocurrency companies Gemini Trust Company (Gemini), Genesis Global Capital, LLC, and Digital Currency Group, Inc. (DCG), alleging that they defrauded over 230,000 investors, with at least 29,000 of them being residents of New York, out of more than $1 billion.
The lawsuit focuses on deceptive practices employed by these companies. It reveals that Gemini misled investors about its Gemini Earn investment program, falsely portraying it as a low-risk investment. However, the investigation conducted by the Office of the Attorney General (OAG) found that Gemini concealed the risky financials of Genesis, the partner in the Gemini Earn program.
Furthermore, the lawsuit implicates Genesis, its former CEO Soichiro Moro, DCG, and DCG’s CEO Barry Silbert in defrauding investors by attempting to hide over $1.1 billion in losses, which ended up being shouldered by the investors. Many individuals lost substantial sums of money, with some even losing their life savings.
I'm suing cryptocurrency companies @Gemini, @GenesisTrading, and @DCGco for defrauding 230,000 investors out of more than $1 billion.
This is yet another example of the harms of an unregulated crypto industry.https://t.co/ysLVm8nujr— NY AG James (@NewYorkStateAG) October 19, 2023
The consequences of these fraudulent activities have been severe. Approximately 230,000 investors, including many New Yorkers, lost around $1 billion. Some victims include a 73-year-old grandmother who invested her and her husband’s life savings and a 56-year-old New Yorker who lost nearly all his savings.
Earlier this year, Attorney General James filed a lawsuit against KuCoin for permitting investors in New York to engage in cryptocurrency trading without adhering to the state’s registration requirements. The lawsuit represents the eighth move by AG James aimed at imposing regulations and transparency on cryptocurrency platforms.
Attorney General James is determined to take strong action to protect investors and the cryptocurrency industry from deceptive practices. This lawsuit seeks to permanently prevent these companies from engaging in any financial investment activities in New York, provide restitution to the defrauded investors, and require the disgorgement of ill-gotten gains.
