New York Attorney General Letitia James is suing Gemini Trust Co. and Digital Currency Group, accusing the companies of defrauding cryptocurrency investors of $1.1 billion.
Crypto exchange operator Gemini and DCG’s Genesis Global Capital unit allegedly did not disclose financial risks to those investing in a crypto-lending program they began in 2021, according to the lawsuit filed Thursday by the state’s top law enforcement officer. The program went belly up last year amid bankruptcies including San Bankman-Fried’s FTX.
Founded by Tyler Winklevoss and Cameron Winklevoss, Gemini allegedly deceived customers about the risk of the loans in the venture with Genesis and also failed to reveal that at one time, nearly 60% of its third-party loans were to Bankman-Fried’s crypto trading firm, Alameda Research, James claims.
James is seeking to ban Gemini, Genesis and DCG from the financial investment industry as well as looking for restitution for investors.
“These cryptocurrency companies lied to investors and tried to hide more than a million dollars in losses, and it was middle-class investors who suffered as a result,” James said in a news release.
— This is a developing story.
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