The New York Attorney General (AG) has sued Gemini Exchange and the Digital Currency Group (DCG) for an alleged $1.1 billion fraud. The AG said the Gemini and DCG-owned Genesis Global Capital (Genesis) offered a lending program in 2021 without adequate disclosure of risks.
Gemini reportedly misled investors about the risks of loans it extended to third parties like Alameda Research. The loans caused significant losses, which Genesis and Gemini allegedly tried to cover up, according to the AG.
Genesis and Gemini Didn’t Disclose Risks
Letitia James, the AG office’s top cop, said the companies exploited the “under-regulated” crypto industry to cause harm to investors. She said these practices deceived customers through false promises and promised more crackdowns.
“My office will continue our efforts to stop deceptive cryptocurrency companies and to push for stronger regulations to protect all investors.”
James accuses Genesis of lying to Gemini that it regularly audited the health of its borrowers. The state found no records of audits over a period of two years.
Read more: 11 Best Crypto Exchanges for Beginners
Genesis also allegedly covered up its true financial situation with a $1.1 billion promissory note, the prosecutor said. Gemini failed to warn customers about Genesis’ financial difficulties despite mulling the potential closure of the Earn program.
Go to Source to See Full Article
Author: David Thomas
Tip BTC Newswire with Cryptocurrency
Donate Bitcoin to BTC Newswire
Donate Bitcoin Cash to BTC Newswire
Donate Ethereum to BTC Newswire
Donate Litecoin to BTC Newswire
Donate Monero to BTC Newswire
Donate ZCash to BTC Newswire
