Bitcoin cryptocurrency. (Photo: AFP/TTXVN)
|
New York Attorney General Letitia James on October 19 filed a lawsuit against cryptocurrency companies Gemini and Genesis, accusing them of fraud that caused investors more than $1 billion in losses.
The lawsuit targets Gemini Trust, founded by twin brothers Tyler and Cameron Winklevoss, who gained fame in the early days of Facebook.
According to the lawsuit, the company misled investors about the risk involved in investing in a program that concentrated loans at Alameda Research, a company led by former FTX CEO Sam Bankman-Fried, who is facing a series of alleged financial fraud charges.
In a statement, the New York Attorney General said that about 230,000 investors across the United States lost more than $1 billion as they were blatantly deceived that their money would be safe and grow if they invested in Gemini Earn.
According to the lawsuit, Gemini invited participants to lend cryptocurrency in exchange for high profits through the Gemini Earn program. This included some loans to the Genesis digital asset services platform. The platform then lent to other companies in the same industry.
However, the bankruptcy of Alameda Research and Bankman-Fried’s FTX platform caused panic in the market in November 2022. Unable to meet the massive withdrawal requests, Genesis also filed for bankruptcy in January of this year.
Attorney General James alleges that Gemini concealed the risk of investing with Genesis, and Genesis lied to the public about its losses. James accuses Gemini of deceiving more than 230,000 investors in the United States.
According to documents released at the time, the loan from Gemini to Genesis amounted to nearly $765 million.
In addition, James argues that former Genesis CEO Soichiro Moro and Genesis’ parent company DCG are trying to cover up large losses. The lawsuit seeks to ban Gemini, Genesis, and DCG from participating in New York’s financial industry and compensate affected investors.
In a post on X (formerly Twitter), Gemini said that the lawsuit confirms that this exchange and its users were “victims of a large-scale scam and systematically deceived by Genesis.” The company also noted that blaming the victims for being deceived is pointless.
DCG also defended itself in a post on X, stating that they did nothing illegal. DCG founder and CEO Barry Silbert affirmed that the Attorney General’s lawsuit is baseless and expresses the intention to fight against the allegations in court.
H.Thuy
