The Winklevoss twins, the first crypto millionaires, denounced for fraud by the New York Prosecutor’s Office

The New York Attorney General’s Office on Thursday accused the cryptocurrency exchange platforms Gemini and Genesis Global, as well as the latter’s parent company, Digital Currency Group, of defrauding thousands of investors of approximately $1 billion. The lawsuit centers around an investment program called Gemini Earn, for which Gemini allied with Genesis and offered it as a low-risk option, despite having internal analyzes that showed risks in Genesis accounts linked to the failed FTX platform.

“Gemini knew that the Genesis loans were insufficiently collateralized and that at one point they were highly concentrated in a single entity, Alameda, owned by Sam Bankman-Fried (founder of FTX), but did not disclose this information to investors,” denounces the statement from the Prosecutor’s Office. The prosecutor, Letitia James, indicated that Gemini “hid the risks of investing with Genesis, and Genesis lied to the public about its losses,” which amounts to fraud and an example of how “malicious actors” cause harm to the public thanks to “an industry of cryptocurrencies that is underregulated.”

The authority concluded after an investigation that the accused companies lost more than $1 billion, affecting 230,000 investors. He points out as an example two investors aged 73 and 56 who invested all their savings in the program and have lost them.

The civil lawsuit, which includes the executives of Genesis and its parent company, demands the restitution of that money to investors and a ban on companies in the financial sector of the state of New York.

Gemini is a well-known platform in the digital currency sector run by brothers Cameron and Tyler Winlklevoss, who competed with Mark Zuckerberg for the original idea of ​​Facebook and are considered the first to amass a billion-dollar fortune thanks to cryptocurrencies. Genesis was one of the first companies hit by the bankruptcy of FTX, after which it announced that it was seeking an injection of $1 billion and that it was paralyzing withdrawals from the Gemini Earn program.

The Winklevosses issued a statement through their company in which they considered themselves victims of fraud by Genesis and its parent company and indicated that they will defend themselves against the accusations.

Sam Bankman-Fried, founder and CEO of FTX, also faces trial for multiple crimes of fraud and money laundering that could lead to more than 100 years in prison if convicted of all of them. Letitia James is also the prosecutor in his case.

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