According to the Financial Times , the lawsuit was filed by New York Attorney General Letitia James in a US court on October 19, accusing digital currency corporation Digital Currency Group and its subsidiary Genesis, along with the Gemini exchange, of defrauding more than 230,000 investors of more than $1.1 billion.
Gemini logo at a conference in Florida (USA) in 2022
Ms. James wants the defendants to return the money to investors and forfeit any benefits gained from the wrongful activities, and to ban the three companies from participating in financial investment activities in New York.
According to Reuters, the center of the lawsuit is the Gemini Earn program, which Gemini - the company of the Winklevoss brothers - partnered with Genesis. The program allows customers to lend digital assets such as bitcoin to Genesis.
Gemini called the investment program low-risk, even though internal analysis showed Genesis was at financial risk, James said. She said Gemini knew Genesis’s loans were unsecured and at one point were highly concentrated in a single entity, the Alameda digital currency hedge fund run by Sam Bankman-Fried, who has since collapsed. Bankman-Fried, the founder of the FTX exchange, is in jail on fraud charges. The companies did not disclose that information to Gemini Earn investors, James said.
Winklevoss brothers
Genesis filed for bankruptcy protection in January. Gemini was founded by twins Cameron and Tyler Winklevoss, who are best known for suing billionaire Mark Zuckerberg for allegedly stealing their ideas for Facebook.
The New York attorney general’s latest lawsuit against three companies shows that challenges for the digital currency industry continue, nearly a year after FTX went bankrupt.
Source link
Comment (0)