Complaint.pdf

The People of the State of New York, by Letitia James, Attorney General, filed a complaint against Gemini Trust Company, Genesis Global Capital, Genesis Asia Pacific, Genesis Global Holdco, Digital Currency Group, Soichiro Moro, and Barry Silbert. The complaint alleges two fraudulent schemes: the Gemini Scheme, where Gemini solicited money from the public with false assurances about the liquidity and creditworthiness of Genesis Capital, and the DCG Scheme, where the Genesis Entities, Moro, and Silbert concealed over $1 billion in losses through misstatements and omissions. Gemini promoted its Earn investment program as low-risk and highly liquid, but internal risk analyses showed Genesis Capital's loan book was undercollateralized, and Gemini's credit rating for Genesis Capital was downgraded to junk grade. Despite this, Gemini continued to take in investments and failed to disclose the risks and its termination of the Earn program to investors. The DCG Scheme involved the Genesis Entities, Moro, and Silbert making false representations about Genesis Capital's financial condition after a major borrower defaulted, creating a "structural hole" that impaired Genesis Capital's ability to repay its liabilities.