Gemini, founded by Tyler Winklevoss and Cameron Winklevoss, lied to customers about how risky loans were in its venture with Genesis and failed to disclose that at one point, almost 60% of its third-party loans were to Bankman-Fried’s crypto trading firm Alameda Research, the state claims. Genesis and DCG were accused in the suit of trying to conceal spiraling losses.
Gemini Trust Co. and Barry Silbert’s Digital Currency Group were sued by New York’s top law-enforcement officer for allegedly defrauding customers of US$1.1 billion ($1.51 billion), escalating legal woes for two companies hit hard by last year’s plunge in cryptocurrency markets.
The lawsuit filed Thursday by New York Attorney General Letitia James accuses Gemini, which operated a crypto exchange, and DCG’s Genesis Global Capital unit of failing to disclose to investors the risks of a crypto-lending program they started in 2021. The venture’s assets collapsed last year amid several high-flying bankruptcies, including Sam Bankman-Fried’s FTX.
