US Accuses Gemini and DCG of Defrauding Investors

New York State prosecutors have filed a lawsuit against Gemini, Genesis, Digital Currency Group (DCG), and their respective executives, accusing them of defrauding over 230,000 investors and scamming them out of more than $1 billion.

According to the investigation, Gemini misled investors by falsely claiming the low-risk nature of their Earn staking program, which they launched in partnership with Genesis.

The company, owned by the Winklevoss brothers, repeatedly assured investors of the program’s safety.

However, authorities allege that Gemini transferred the funds raised from the program to Genesis, which then used them to issue high-risk loans to Three Arrows Capital and Alameda Research.

The lawsuit alleges that Gemini was aware of the risky nature of Genesis’ loans and the company’s financial troubles but deliberately concealed this information from investors.

Genesis, its former CEO Shichiro Moro, parent company DCG, and CEO Barry Silbert are accused of intentionally hiding over $1.1 billion in losses suffered by investors.