N.Y. attorney general files suit against Genesis, Gemini, Digital Currency Group

New York Attorney General Letitia James sued Gemini Trust, Genesis Global Capital and Digital Currency Group over allegations of fraud that affected 230,000 investors with more than $1 billion in reported losses.

In a statement Thursday, James said her office's investigation showed Gemini's investment program run in partnership with Genesis was low-risk.

"However, OAG's investigation found that Gemini's internal analyses of Genesis showed that the company's financials were risky," she said.

The suit also claims that "Gemini knew Genesis' loans were undersecured and at one point highly concentrated with one entity, Sam Bankman-Fried's Alameda, but did not reveal this information to investors."

Alameda Research was a quantitative trading firm linked to Bankman-Fried's now-bankrupt FTX crypto exchange. Bankman-Fried is on trial facing fraud and conspiracy charges.

James' lawsuit charges Genesis, its former chief executive, parent company DCG and DCG's CEO with "defrauding investors and the public by trying to conceal more than $1.1 billion in losses, which were borne by investors."

The attorney general said some investors lost their life savings.

Gemini, a digital asset platform, said it disagreed with the attorney general's decision to include it in the lawsuit.

"Blaming a victim for being defrauded and lied to makes no sense and we look forward to defending ourselves against this inconsistent position," the company said in a statement on X.

Genesis, a financial services firm, didn't immediately reply to MT Newswires' e-mailed request for comment. DCG, which invests in bitcoin and blockchain companies including Genesis, also didn't reply to a request for comment.

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