The crypto conglomerate Digital Currency Group today published its financial results for the third quarter to shareholders, providing an overview of the financial performance of its various businesses and an update on the fraud lawsuit initiated by the New York Attorney General against its now-defunct subsidiary, Genesis.
The core of the NYAG's case revolves around DCG's participation in Gemini's Earn program, which was administered by Gemini but had its funds managed by Genesis. New York prosecutors allege that DCG and Gemini lied to investors and withheld information from creditors, noting specifically that its investigation found "Gemini’s internal analyses of Genesis showed that the company’s financials were risky."
The lawsuit also charges former Genesis CEO Michael Moro and Silbert with "defrauding investors and the public by trying to conceal more than $1.1 billion in losses, which were borne by investors."
In its third quarter update, DCG said that the civil suit "blind sided" the company, adding that there is "no evidence of wrongdoing by DCG, Barry Silbert, or our employees."
"Attorney General Letitia James is an elected official who has publicly tasked her office with going after crypto companies in New York State, and she has previously made overly broad allegations about our entire industry in press releases," DCG said.