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Digital Currency Group and its CEO, former crypto billionaire Barry Silbert, were sued by a New York state attorney Wednesday, accusing the cryptocurrency company and Silbert of defrauding investors of $3 billion. filed a motion to dismiss the civil suit brought by the Commissioner.
important facts
Digital Currency Group (DCG) said in a court filing that Attorney General Letitia James' allegations rest on a “thin web of baseless innuendo, blatant misinterpretations, and unsubstantiated conclusive statements.” claimed to be constructed.
James said DCG withdrew funds from its bankrupt cryptocurrency lending unit Genesis shortly after hedge fund Three Arrow Capital filed for bankruptcy, and that DCG had withdrawn funds from its bankrupt cryptocurrency lending arm Genesis shortly after hedge fund Three Arrow Capital filed for bankruptcy, despite an internal analysis revealing investment risks. He claimed to have told Genesis investors that the company was operating “business as usual.”
But DCG claims it instead donated about $1.4 billion in cash and other assets to Genesis, making statements suggesting the business is operating “normally” too much to argue is fraudulent. He added that it was ambiguous.
The $1.1 billion promissory note cited by James was “fully valid” and “properly reviewed and approved” by the DCG board before being issued to Genesis. the company claims.
DCG also claimed that other “unauthorized statements” cited by James were made by Genesis.
Main background
Mr James last year forced DCG and Gemini, the exchange run by billionaire twins Cameron and Tyler Winklevoss, to disclose risks associated with their joint lending platform Gemini Earn. The company filed a lawsuit accusing it of defrauding thousands of investors. An investigation by the New York Attorney General's Office allegedly found that Gemini Earn reassured investors that there was little risk in investing, even though internal analysis suggested otherwise. Ru.gemini claimed Including this content in the complaint is tantamount to “blaming the victim who was deceived and lied to.'' The company later sued DCG, accusing it of committing accounting fraud while it and Silbert “embarked on a carefully orchestrated campaign of lies” to hide Genesis' liquidity problems. Mr. James is seeking more than $3 billion in damages from both companies after expanding his charges last month to include more than 230,000 investors.
tangent
Genesis settled its lawsuit with Mr. James last month after the company filed for a bankruptcy reorganization plan that returned assets to Gemini Earn's former investors and other creditors. The scheme was condemned by DCG, which claimed it would give customers “additional payments” beyond their bill. Despite the agreement, Genesis was still named in James' expanded complaint a week later. It was not immediately clear how the amended complaint would affect Genesis' settlement.
Forbes rating
We estimated Silbert's net worth in 2022 to be $3.2 billion, but he fell off Forbes' list of billionaires as DCG's debt increased. Cameron Winklevoss and Tyler Winklevoss are each worth $1.4 billion.
References
New York State Expands Lawsuit Against Gemini and DCG—Seeks $3 Billion in Alleged Crypto Fraud Scheme (forbes)
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