Crypto firms DCG, Gemini, Genesis sued by New York AG for alleged fraud

New York Attorney General Letitia James filed a lawsuit against cryptocurrency firms Genesis Global, its owner Digital Currency Group and Gemini for allegedly defrauding over 230K investors of more than $1B, according to a Thursday release. James is seeking restitution for investors, as well as disgorgement of ill-gotten gains and a ban on all three firms from New York's financial investment industry. The complaint said that Gemini lent funds to Genesis as part of its Earn program, a high-yield crypto lending product. The funds were then lent to a number of counterparties, including now-bankrupt crypto hedge fund Alameda Research, leaving Genesis with $1.1B in losses. The Suit further alleged that Gemini had knowledge of Genesis' undersecured loans, but didn't disclose this information to investors. "Gemini hid the risks of investing with Genesis and Genesis lied to the public about its losses. This fraud is yet another example of bad actors causing harm throughout the under-regulated cryptocurrency industry," James said . In January, the Securities and Exchange Commission sued Genesis and Gemini for allegedly selling unregistered securities to retail investors through Gemini Earn. More on the Crypto Market Did SEC Admit Defeat? Bitcoin ETF Could Be Near Where We See Crypto Mining Stocks Headed Galaxy Digital's Novogratz thinks SEC will approve bitcoin ETF this year