On Thursday, New York’s attorney general filed a lawsuit against three digital asset firms that were caught up in the collapse of Bankman-Fried’s empire last fall — Gemini Trust, Genesis Global Capital and Digital Currency Group, parent company of Genesis.
The fallout from the colossal implosion of Sam Bankman-Fried’s crypto business is still rippling through the digital asset industry nearly a year later. The lawsuit accused the companies of lying to investors and covering up more than $1 billion in losses. The AG’s office said that an investigation found Gemini, the crypto firm founded by Cameron and Tyler Winklevoss, deceived investors about significant risks associated with a lending service it ran jointly with Genesis.
The lending unit later filed for bankruptcy. According to the latest lawsuit, Gemini knew that Genesis’ loans were risky and, at one point, “highly concentrated” with Bankman-Fried’s crypto trading house Alameda Research. Bankman-Fried is currently on trial in federal court in New York, where he has pleaded not guilty to seven counts of fraud and conspiracy. “Gemini hid the risks of investing with Genesis, and Genesis lied to the public about its losses,” James said.
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