Crypto Groups Gemini, Genesis, and DCG Sued for $1.1 Billion ‘Fraud’

In the state of New York, where Sam Bankman-Fried, founder of fallen crypto exchange FTX, is standing trial for fraud, the attorney general has accused a further three high-profile crypto businesses of lying to their customers. Crypto exchange Gemini, run by the Winklevoss twins, Cameron and Tyler, as well as crypto lender Genesis and its parent company, Digital Currency Group, have been charged with causing a combined $1.1 billion in losses for hundreds of thousands of investors. Lo and behold, when Genesis was caught in the FTX blowback in November 2022 and forced to file for bankruptcy two months later, Gemini Earn customers lost access to about $900 million of their money. Gemini and Genesis had already been sued by the Securities and Exchange Commission in January in relation to the Gemini Earn program, which the US financial regulator claimed amounted to an unregistered securities offering. While Gemini failed to alert customers to their risk exposure, the attorney general claims, Genesis and DCG failed to assess the quality of the loans it meted out, then attempted to conceal losses incurred in mid-2022 when hedge fund Three Arrows Capital and another smaller counterparty defaulted on loans amounting to $1.1 billion.