Digital Currency Group Files Motion to Dismiss Lawsuit by NY Attorney General
Digital Currency Group (DCG), the parent company of the now-defunct cryptocurrency lending platform Genesis Global Capital, has taken action to dismiss the lawsuit filed against it by New York Attorney General Letitia James.
Additionally, DCG founder and CEO Barry Silbert has filed a motion to dismiss the accusations that he concealed losses at the firms, allegedly leading to the deceit of customers and investors.
DCG, along with its founder and CEO, Barry Silbert, filed motions to dismiss the lawsuit on Wednesday, March 3rd. The lawsuit, initially filed in October and later expanded, alleges that investors connected to Gemini Earn, which Genesis ran in partnership with Gemini, were defrauded of $3 billion due to DCG and others concealing losses incurred during the collapse of various crypto firms.
The lawsuit alleges that the companies were aware of under-secured loans and high concentrations with FTX’s sister company, Alameda Research. Additionally, it claims that Digital Currency Group and Silbert concealed financial discrepancies through a promissory note between the parent company and Genesis.
The lawsuit seeks to prohibit Gemini, Genesis, and DCG from operating in the financial investment industry in New York and to secure restitution for investors and the return of any ill-gotten gains.
Genesis suspended withdrawals in November 2022 and filed for bankruptcy in January 2023. This was allegedly due to DCG and others hiding losses incurred during the collapse of crypto firms like Three Arrows Capital (3AC) and FTX.
In response to the lawsuit, DCG has asserted that the allegations are baseless and consist of mischaracterizations and unsupported statements. The company maintains that the claims against it lack merit
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