The NYAG has thrown major crypto firms, including Gemini, Genesis, and the Digital Currency Group (DCG), into the midst of a significant financial scandal. It’s alleged that these companies have extracted more than $1 billion from investors.
New York Attorney General Letitia James is filing a lawsuit against the Gemini exchange, led by the Winklevoss twins, the crypto lending company Genesis, and its parent company, the Digital Currency Group. According to the NYAG’s claim, both Genesis and its parent company, the Digital Currency Group, are involved in the $1 billion fraud. The report states that these firms have defrauded more than 230,000 investors.
From Loan Money to Fraud…
It’s mentioned that Gemini lent money to Genesis under its Earn program. However, during the management of these funds, they were also lent to firms like Three Arrows Capital and Alameda. Nevertheless, certain financial troubles and bankruptcy situations caused Genesis to face a severe financial crisis. This led the company to confront a $1 billion financial gap. It’s alleged that the Digital Currency Group covered this financial deficit, but in reality, they only provided a promissory note to its subsidiary, Genesis, to cover these losses.
In NYAG’s complaint, it’s highlighted that this situation includes not just one but two separate fraud schemes.