Gemini

Not stopping at the companies, the lawsuit has further implicated notable figures from the crypto world. Genesis's ex-CEO, Soichiro “Michael” Moro, and Barry Silbert, the CEO and founder of DCG, have been accused of clandestinely incurring <a href="https://financefeeds.com/gemini-earn-users-to-recover-95-110-of-their-claims/">$1.1 billion in losses</a>, thereby "defrauding investors and the public." 
Per the official statement, the deceptive practices of these firms have impacted around 230,000 investors. Gemini has come under fire for allegedly misrepresenting its investment scheme, 'Gemini Earn', painting it as a “low-risk investment,” contrary to its true nature. 
Meanwhile, the statement recalls an event from June 2022 when the bankrupt hedge fund Three Arrows Capital failed to repay loans amounting to billions of dollars. Simultaneously, another setback for Genesis was a $100 million loss from Babel Finance, thereby escalating its total losses beyond $1.1 billion. 
This lawsuit comes amid heightened scrutiny on key players in the crypto sector. <a href="https://financefeeds.com/sam-bankman-fried-could-face-115-year-sentence-in-ftx-case/">Bankman-Fried</a>, the co-founder of crypto exchange FTX and its trading arm Alameda, currently faces fraud and money laundering charges. The bankruptcy of FTX and Alameda in November had a domino effect, causing Genesis to declare bankruptcy in January. 
Reiterating the gravity of the situation, the U.S. Securities and Exchange Commission (SEC) slapped <a href="https://financefeeds.com/gemini-fires-back-at-secs-allegations-of-offering-unregistered-securities/">Genesis and Gemini with charges</a> relating to the unauthorized sale and offer of securities via its Earn lending program. The two entities, according to the prosecution, amassed billions in crypto assets from a vast pool of investors. 
The lawsuit further alleges deceptive conduct by Genesis, its former CEO Moro, DCG, and its <a href="https://financefeeds.com/barry-silbert-says-geminis-earn-lent-genesis-not-dcg/">CEO Silbert</a>. Their purported deceit resulted in massive financial losses for numerous investors, with some even losing their entire life savings. Given the magnitude of the allegations, the NYAG's aims not only to ensure restitution for the aggrieved investors but also to bar Gemini, Genesis, and DCG from any investment business in New York, while also seeking the disgorgement of their ill-gotten wealth. 
“One of the New York investors harmed by Gemini Earn was a retired 73-year-old grandmother, who invested her and her husband’s lifesavings of over $199,000 in Gemini Earn because they believed Gemini’s marketing statements that it was a safe and secure choice. The investor had hoped to use this money to pay for her grandchild’s education, but lost it all because of this fraud,” the agency stated. 
Yet another <a href="https://financefeeds.com/gemini-criticizes-genesis-recovery-plan-as-deceptive-at-worst/">Gemini Earn</a> investor, a 56-year-old resident of New York, reportedly invested and subsequently lost around $20,500, which amounted to nearly all of his savings. His choice of the scheme was based on the belief that, in accordance with Gemini's statements, it offered a higher level of security compared to other interest-bearing cryptocurrency investments.

NYAG sues Gemini and Barry Silbert for $1.1 billion fraud

FinanceFeeds

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