In October 2023, the New York Attorney General’s Office (NYAG) filed a $3 billion lawsuit against crypto firms Gemini, Genesis, and DCG, accusing them of defrauding investors through the Gemini Earn investment program. The NYAG alleged that these companies misled investors, including 29,000 New Yorkers, about the program.
On Feb. 8, DCG subsidiary Genesis settled with the NYAG. However, the following day, the NYAG filed an expanded complaint against DCG and included Genesis as defendants. DCG objected to the settlement reached by Genesis and the NYAG on Feb. 21.
On March 6, DCG and Silbert issued a statement refuting the NYAG’s allegations and filed motions to dismiss the lawsuit. They described the accusations as unfounded and based on “baseless innuendo, blatant mischaracterizations, and unsupported conclusory statements.”
DCG asserts its innocence, stating that it acted in good faith and followed advice from reputable professionals. They refute claims of participation in fraud and assert that the NYAG is attempting to scapegoat them for losses caused by others.
DCG counters the NYAG’s allegations, asserting that they did not create a liquidity crunch. They claim to have invested hundreds of millions into Genesis following the collapse of Three Arrows Capital (3AC). Additionally, they mention a $1.1 billion promissory note, which they describe as a binding obligation vetted and endorsed by advisers, accountants, and the firm’s board of directors.
DCG vows to vigorously defend against the claims and expresses optimism about the growth opportunities in the industry. They aim to focus on these opportunities moving forward while resolving the legal issues.
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