Winklevoss twins’ Gemini and other crypto firms face charges of fraud for loosing over $1 billion of investors’ funds
New York Attorney General Letitia James initiated legal action against several cryptocurrency companies including Winklevoss twins’ crypto exchange Gemini Trust, Genesis Global Capital and Digital Currency Group, reported The Messenger.
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The attorney accused cryptocurrency companies of losing over $1 billion of investors’ funds. James said, “My office will continue our efforts to stop deceptive cryptocurrency companies and push for stronger regulations to protect all investors.”
The Winkelvoss Twins who consisted of Cameron and Tyler had sued Facebook founder Mark Zuckerberg, who was a fellow Harvard student, for stealing their idea. They lost the legal battle and later founded cryptocurrency company Gemini.
James accused Gemini and its affiliates on October 19 with fraud. The lawsuit states that these companies deceived clients into investing in a program known as Gemini Earn, falsely promoting it as low-risk with high returns. Gemini Earn program was run by Gemini and Genesis while around 232,000 of Gemini Earn investors had their accounts frozen by Gemini and Genesis the lawsuit alleged with some investors even losing their life savings.
In 2021, Gemini launched its “Gemini Earn” crypto investing platform with crypto lender Genesis Capital and parent company Barry Silbert’s Digital Currency.
Genesis declared bankruptcy in January with the Winklevoss twins withdrawing around $280 million months before suspecting distress over the fund. Customers were unable to withdraw their funds as deposits were frozen in November 2022.
A 73-year-old grandmother whose account was frozen and had invested $199,000 said, “Are you going to be able to give us our money any time soon? I am crying all day.” She added, “Without that money, I am doomed.”
Lawsuits against other crypto platforms including CoinEx, Coin Cafe, KuCoin, Nexo and Celsius were also filed by The New York AG that failed to register as securities companies and defrauded investors, reported The Messenger.
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Updated: 20 Oct 2023, 03:08 PM IST
