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- 1 The crypto companies are already facing legal issues from regulators and now attorneys are joining.
- 2 Gemini, Genesis, and DCG are going to be in trouble after the recently filed lawsuit.
Gemini, Genesis, and Digital Currency Group (DCG) are likely to get into trouble after a recently filed lawsuit. New York Attorney General Letitia James has launched legal action against the three prominent cryptocurrencies filed on Thursday. It alleged that these companies employed deceptive practices, resulting in substantial losses exceeding $1 Billion for more than 230,000 investors.
The legal action, spearheaded by Attorney General Letitia James, focuses notably on Gemini, the cryptocurrency exchange owned by the Winklevoss twins, Cameron and Tyler.
The lawsuit zooms in on Gemini’s Earn program, marketed as a high-yield investment opportunity where customers could invest through Genesis Global Capital, a subsidiary of DCG. Attorney General Letitia James contends that Gemini was fully aware of the inherent risks in investing with Genesis and, subsequently, misled its customers.
A significant turning point in this case occurred last November when Gemini suspended withdrawals from its Earn program. This decision came in response to the collapse of FTX, an event that left customers unable to access their funds.
Intriguingly, the Winklevoss twins were reported to have withdrawn approximately $280 Million from Genesis shortly before the company’s eventual collapse.
In a parallel legal move, Attorney General Letitia James has initiated a lawsuit against Genesis and its parent company, DCG. This lawsuit revolves around allegations of an attempted cover-up of losses exceeding $1 Billion.
Attorney General James is pushing for a ban on Gemini, Genesis, and DCG’s involvement in the investment sector in New York. Additionally, she is advocating for these companies to compensate for damages, restitution, and the disgorgement of all funds and cryptocurrencies they may have gained due to their alleged deceptive practices.
In a strongly worded statement, Attorney General Letitia James stated, “These cryptocurrency companies lied to investors and attempted to conceal over a billion dollars in losses, and it was middle-class investors who bore the brunt of these actions.”
She emphasized that hardworking individuals in New York and investors nationwide sustained losses exceeding a billion dollars due to false assurances about the security and profitability of their investments in Gemini Earn.
Noteworthy is that it’s not new for Genesis and Gemini to face legal issues beyond this recent lawsuit. Gemini faced a lawsuit last year from an investor who alleged that the platform failed to protect customers from a $36 Million theft in cryptocurrencies.
Furthermore, both companies encountered a legal challenge from the Securities and Exchange Commission (SEC) in January. It asserted that they had sold unregistered securities.
The legal actions underscore the increasing regulatory scrutiny on the cryptocurrency industry. Among the countries taking actions the United States takes the lead. The authorities seek to protect investors and ensure the integrity of financial markets.
The cryptocurrency community and investors closely watch the legal tussle, observe the developments, and wait for the resolution.
Nancy J. Allen is a crypto enthusiast, with a major in macroeconomics and minor in business statistics. She believes that cryptocurrencies inspire people to be their own banks, and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning. She frequently researches, and posts content on the top altcoins, their theoretical working principles and technical price predictions.
