Winklevoss Twins’ Crypto Empire Crumbles: NY Attorney General Exposes Massive $3 Billion Fraud!

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In the ongoing lawsuit, New York Attorney General Letitia James filed an amended complaint on Friday that she is expanding her lawsuit against cryptocurrency firms Gemini, Genesis Global Capital, and Digital Currency Group (DCG) to $3 billion, tripling the initial fraud claims 

In October, James filed a $1.1 billion lawsuit against the companies, and she claims that more victims have come forward since then.

$3 Billion Fraud Allegation

The amended complaint alleges that Gemini, the cryptocurrency exchange founded by the Winklevoss twins, is accused by the New York Attorney General of misleading investors. They allegedly assured investors that their money was safe in a program called Gemini Earn, done in partnership with Genesis.

However, the lawsuit claims that Genesis’ loans were risky. They were heavily tied to FTX founder Sam Bankman-Fried’s crypto hedge fund, Alameda Research, and Gemini allegedly knew about this but didn’t tell investors.

As more victims emerged, the Attorney General contends that false assurances about the safety of their funds resulted in additional losses totaling $2 billion. The overall fraud is now estimated to have affected more than 230,000 investors, resulting in over $3 billion in losses.

The lawsuit doesn’t just target Gemini; it also includes former Genesis CEO Soichiro Moro and DCG founder and CEO Barry Silbert.

DCG’s Response

DCG responded to the lawsuit, dismissing it as baseless and expressing confidence in winning in court. The company asserts that it has always conducted its business lawfully and with integrity.

Genesis Bankruptcy

Genesis, filing for bankruptcy in January 2023, has recently reached a settlement with the New York Attorney General’s office, agreeing to pay fraud claims contingent upon fully repaying customers through the Chapter 11 bankruptcy process. This settlement is pending approval from a bankruptcy judge.

Regulatory Scrutiny

Both Genesis and Gemini face legal challenges from the U.S. Securities and Exchange Commission (SEC). The SEC claims that they bypassed disclosure requirements intended to protect Gemini Earn customers. Genesis recently agreed to a $21 million fine with the SEC, dependent on repaying customers first.

Gemini has also initiated legal action against DCG, citing issues related to their crypto-lending partnership.

This legal battle highlights the need for stronger cryptocurrency regulations to protect the interests of investors, according to the New York Attorney General.