THE AMERICA ONE NEWS
Jun 24, 2025  |  
0
 | Remer,MN
Sponsor:  QWIKET 
Sponsor:  QWIKET 
Sponsor:  QWIKET: Elevate your fantasy game! Interactive Sports Knowledge.
Sponsor:  QWIKET: Elevate your fantasy game! Interactive Sports Knowledge and Reasoning Support for Fantasy Sports and Betting Enthusiasts.
back  
topic
Forbes
Forbes
19 Oct 2023


New York Attorney General Letitia James sued embattled crypto titans Gemini and Digital Currency Group on Thursday, accusing the firms of significant fraud due to inadequate risk protocols and adding to the significant legal issues facing the one-time industry leaders.

Bitcoin Conference Draws Cryptocurrency Fans To Miami

The Winklevoss twins accused New York prosecutors of victim blaming by including their firm as a ... [+] defendant in Thursday's lawsuit.

Getty Images

Prosecutors seek to bar Gemini, run by the famous billionaire twins Cameron and Tyler Winklevoss, and Digital Currency Group (DCG), a conglomerate overseen by former billionaire Barry Silbert, from conducting most operations in New York and to pay restitution to affected investors.

According to the complaint, the Gemini Earn program backed by DCG’s now-bankrupt Genesis crypto lending arm defrauded some 280,000 investors of more than $1 billion.

DCG allegedly covered up some $1.1 billion in losses.

Gemini’s concerns about DCG’s risk protocols purportedly triggered Gemini to hold a July 2022 board meeting to consider closing the Earn program, with one board member suggesting if “the market sneezes,” Genesis could be in a liquidity situation akin to Lehman Brothers in 2008.

The market did in fact sneeze: Genesis suspended all withdrawals last November before filing for bankruptcy in January after industry behemoths FTX and Alameda Research collapsed as its significant web of alleged fraud came to light, leading to January’s shutdown of Gemini Earn.

The lawsuit also named Silbert and former Genesis CEO Michael Moro as defendants.

Gemini, which sued DCG in July amid its public campaign against Silbert and his firm, said its inclusion in Thursday’s suit amounts to “blaming a victim for being defrauded and lied to.” DCG, Silbert and Moro have yet to comment.

Alameda, the now-defunct hedge fund founded by the indicted Samuel Bankman-Fried, accounted for 60% of Genesis’ third-party loans last July and August shortly before it went belly up, according to the complaint, with the now worthless FTX crypto token serving as collateral. Genesis decreased its exposure to Alameda after Cameron Winklevoss voiced concerns, but about half of Genesis’ loan portfolio between August and November 2022 were to other DCG affiliates.

Gemini Earn promised depositors interest rates of up to roughly 8% in its roughly 1.5 years of operation. The Securities and Exchange Commission sued Gemini and Genesis in January for hawking unregistered securities via the program. After Genesis’ failure, by far DCG’s largest portfolio company is Grayscale, the self-proclaimed largest crypto asset manager in the world with over $20 billion of assets under management. Silbert was worth as much as $3.2 billion last spring before falling off Forbes’ billionaire rankings amid the turbulence in his empire. Both Winklevoss twins are worth $1.4 billion, according to Forbes’ calculations, down from a peak of $4 billion last year.

The brothers rose to fame for scoring a $65 million settlement over allegations Mark Zuckerberg stole their idea for what became Facebook.

neis

Ge