The Attorney General of New York, Letitia Jamesfiled a lawsuit against three cryptocurrency companies: Gemini, Genesis and Digital Currency Group (DCG).
The accusation is based on the alleged manipulation of misleading information to investors, lor that resulted in losses exceeding one billion dollars for more than 230,000 investors.
The lawsuit focuses on Gemini shares, the cryptocurrency exchange owned by Cameron and Tyler Winklevoss, and its Gemini Earn program. This program was marketed as a high-yield plan in which clients investing with DCG-owned Genesis Global Capital participated.
However, Letitia James maintains that Gemini knew that investing with Genesis involved significant risks and therefore misled customers.
Last November, Gemini suspended withdrawals from its Earn program after the FTX bankruptcy, resulting in clients being unable to access their funds. It was also reported in September that the Winklevoss twins had withdrawn $280 million from Genesis before the company’s bankruptcy.
Cryptocurrencies: false promises and hidden information
Additionally, James sued Genesis and its parent company DCG for allegedly concealing losses of more than $1 billion. The prosecutor seeks to prohibit Gemini, Genesis and DCG from operating in the investment sector in New York. TOHe also wants these companies to pay damages and restitution, as well as the return of all funds and cryptocurrencies they obtained through their alleged schemes.
The attorney general stated that these cryptocurrency companies lied to investors, hiding significant losses, which particularly affected middle class investors. He noted that New York workers and investors across the country suffered losses exceeding $1 billion due to the false promises of security and growth made by Gemini Earn.
Notably, Genesis and Gemini face other legal problems, including a previous lawsuit against Gemini for failing to protect customers from a theft of $36 million in cryptocurrency and a Securities and Exchange Commission lawsuit in January over alleged sales of unregistered securities.
Source: Ambito
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