Norway grants Bitpanda a license as part of its bid to expand throughout Europe.

In a legal filing presented by New York Attorney General Letitia James, allegations have surfaced accusing cryptocurrency enterprises of defrauding investors of a staggering sum exceeding $1 billion.

The New York Attorney General’s office has taken legal action against prominent cryptocurrency entities, namely Gemini, Genesis, and Digital Currency Group (DCG), citing their involvement in alleged fraudulent activities related to the Gemini Earn investment program. A formal statement from Attorney General Letitia James’ office meticulously outlines the foundation of these charges, asserting that these companies engaged in deceiving over 23,000 investors, including 29,000 New York residents, to the tune of more than $1 billion.

According to a comprehensive investigation led by James’ office, it is claimed that Gemini deliberately misled investors regarding the Gemini Earn investment program, which was conducted in collaboration with Genesis. Contrary to Gemini’s assurances of the program being a low-risk investment opportunity, the investigation findings indicate that Genesis’s financial stability posed significant risks. The lawsuit contends that Gemini was well aware of the undersecured nature of Genesis’s loans, which at one point exhibited a high concentration with a single entity, Sam Bankman-Fried’s Alameda. However, Gemini failed to disclose this vital information to its investors.

Furthermore, the lawsuit extends its charges to encompass Genesis, its former CEO Soichiro Moro, the parent company DCG, and its CEO, Barry Silbert. These individuals and entities are accused of attempting to conceal losses exceeding $1.1 billion from unsuspecting investors.

The legal proceedings aim to impose a ban on Gemini, Genesis, and DCG from participating in the financial investment industry in New York. It also seeks to secure restitution for the investors and recover any gains that were illegitimately obtained.

A statement issued by the New York Attorney General underscores the profound impact of these losses on “middle-class investors.” In her words, “Hardworking New Yorkers and investors across the nation suffered substantial financial losses because they were fed blatant falsehoods, promising the safety and growth of their investments within the Gemini Earn program.”

Attorney General James further points out that Gemini concealed the inherent risks of investing alongside Genesis and that the company deliberately misled the public regarding its financial losses. She also takes the opportunity to critique the broader cryptocurrency sector, characterizing this fraudulent episode as yet another instance of malicious actors causing harm in the largely unregulated cryptocurrency industry.

It is worth noting that both Genesis and Gemini faced previous legal action from the United States Securities and Exchange Commission in January 2023, for their alleged involvement in offering unregistered securities through the Earn program.