The U.S. Attorney General's $1 Billion Fraud Lawsuit Targets Cryptocurrency Firms Genesis, DCG, and Gemini

In this lawsuit, Attorney General Letitia James is seeking not only restitution for investors but also aims for these companies to return any improperly gained profits and wishes to bar them from participating in New York's financial investment sector. lawsuit The lawsuit emphasizes the 'Gemini Earn' initiative, a partnership with Genesis, where users had the opportunity to lend cryptocurrencies like bitcoin to Genesis.

From February 2021 until November 16, 2022, Gemini and Genesis Capital allegedly misrepresented that they possessed all required licenses and approvals to fulfill their responsibilities under the Earn program.

While Gemini promoted the program as a lucrative investment opportunity, Attorney General James asserts that internal assessments revealed Genesis was encountering financial challenges, which were not communicated to investors. Moreover, it's claimed that Genesis’s loans were inadequately secured and were disproportionately concentrated with Alameda, the crypto hedge fund founded by Sam Bankman-Fried, which subsequently filed for bankruptcy.

The legal issues surrounding Genesis and Gemini, especially their disputes regarding ‘Gemini Earn,’ underline the intricate nature of the cryptocurrency landscape.

the lawsuit said.

Winklevoss Twins' Effort to Clarify Their $282 Million Withdrawal

Recently, reports from The New York Post and Bloomberg suggested that the Winklevoss Twins withdrew personal funds prior to Genesis's downfall. In response, Gemini stated on X that the withdrawn assets were related to Earn program participants, not corporate funds or personal investments of the Winklevoss Twins. The exchange justified this action as a prudent risk management choice during uncertain market conditions and the disputes with Genesis.

Gemini clarified that the $282 million that was withdrawn in August 2023 was not connected to the Winklevoss Twins’ personal wealth or the exchange’s operational funds. Instead, this amount pertained to users of the Gemini Earn program.

According to Gemini, the guidelines of the Earn program permitted the establishment of a 'liquidity reserve' utilizing a fraction of the deposits made by users. Amid growing market uncertainties, particularly after the collapse of FTX, Gemini resolved to allocate $282 million to enhance their liquidity reserve on August 9, 2023. claimed Gemini asserts that this risk mitigation approach was ultimately in the best interests of Earn users, helping to minimize their exposure to Genesis when the lender stopped processing redemptions later that year.

It's worth mentioning that Gemini is the largest creditor of Genesis, who filed for bankruptcy protection in January. Both Genesis and its former CEO Soichiro Moro, alongside DCG and its leader Barry Silbert, are facing legal action for allegedly hiding over $1.1 billion in losses.

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Agne is a journalist specializing in the latest trends across the metaverse, AI, and Web3 sectors for Metaverse Post. Her love for storytelling has led her to interview various experts in these rapidly evolving fields, continuously searching for stimulating narratives. Agne has a Bachelor's degree in literature and boasts a diverse writing background spanning topics from travel and art to culture. She has also volunteered as an editor for an animal rights organization, where she amplified awareness regarding welfare concerns. Reach out to her on

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