Venture capital firm Digital Currency Group (DCG), along with its CEO Barry Silbert, has moved to dismiss a $3 billion lawsuit filed by the New York Attorney General’s Office (NYAG), arguing that the fraud allegations lack merit.
The lawsuit, filed in October 2023, targeted cryptocurrency companies Gemini, Genesis, and DCG, accusing them of defrauding approximately 230,000 investors, including 29,000 New Yorkers, through the Gemini Earn investment program. NYAG asserted that the companies misled investors and misrepresented their investment strategies.
In February 2024, a subsidiary of DCG, Genesis, reached a settlement with NYAG. However, shortly after the settlement, NYAG filed an expanded complaint against DCG, with Genesis named as one of the defendants. DCG immediately contested the settlement reached on February 21 between Genesis and NYAG.
On March 6, DCG and Silbert released statements refuting the allegations made by NYAG. Additionally, they filed a motion to dismiss the lawsuit, denouncing the accusations as "unfounded insinuations, deliberate misrepresentations, and unsupported conclusions." DCG is confident that as the case unfolds, it will demonstrate the company's innocence. Moreover, DCG emphasized that its actions were undertaken with the utmost integrity and in accordance with guidance from reputable professionals.
Despite NYAG's claims alleging that DCG's actions led to a liquidity crisis, DCG defended its position, stating that it injected substantial capital into Genesis following the collapse of Three Arrows Capital (3AC). The firm also highlighted a $1.1 billion promissory note, describing it as a legally binding commitment that had been thoroughly reviewed and endorsed by advisors, accountants, and the company's board of directors. DCG reiterated its determination to vigorously contest the allegations and expressed optimism about overcoming the legal challenge to focus on the industry's growth prospects in the years ahead.
