The state of New York has taken legal action against Gemini, Genesis, Digital Currency Group (DCG), and their executives for allegedly deceiving over 230,000 investors and defrauding them out of more than $1 billion.
After conducting an investigation, it was found that Gemini misled users about their Earn staking program, which was jointly implemented with Genesis.
Despite repeated assurances by Gemini, the program was revealed to be high-risk. Gemini transferred the funds raised through Earn to Genesis, which in turn used them to provide loans to Three Arrows Capital and Alameda Research.
The lawsuit alleges that Gemini was aware of the undersecured nature of Genesis’ loans and their poor financial performance, but chose to conceal this from investors.
The former CEO of Genesis, Michael Moro, along with DCG and its CEO Barry Silbert, are also accused of hiding over $1.1 billion in losses suffered by investors.
