Digital Currency Group (DCG) and its CEO, Barry Silbert, have taken legal action to dismiss a $3 billion lawsuit filed in October 2023 by the New York Attorney General's Office (NYAG).
The lawsuit targeted crypto enterprises Gemini, Genesis, and DCG for allegedly defrauding more than 230,000 investors via the Gemini Earn program, 29,000 of which were New York residents.
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Genesis, a DCG subsidiary, settled with the NYAG on February 8, shortly before the NYAG expanded the complaint to include DCG and Genesis again, prompting DCG to challenge the settlement on February 21.
DCG and Silbert filed motions to dismiss the NYAG's accusations on March 6 and stated:
The allegations are a thin web of baseless innuendo, blatant mischaracterizations, and unsupported conclusory statements.
DCG's statement staunchly defends their actions, criticizing the lawsuit as an attempt to find a "headline-worthy scapegoat" for losses they had no hand in causing.
The firm and its CEO insist that their support of Genesis, particularly after the collapse of Three Arrows Capital (3AC), was a conscientious and good-faith effort to stabilize the market.
According to DCG, this support received the full backing and approval of esteemed advisers and the board of directors, emphasizing their commitment to rectifying the liquidity crisis responsibly. It was highlighted by an investment of "hundreds of millions of dollars," including a $1.1 billion promissory note.
With confidence in the legality and integrity of their conduct, DCG and Silbert mentioned:
We will continue to vigorously fight these claims and we look forward to putting this issue behind us as we focus on the massive growth opportunity in our industry in 2024 and beyond.
As DCG stands firm against the allegations, the outcome of this motion to dismiss could set a precedent for how similar disputes are addressed in the future.
The ongoing tension between crypto firms and regulatory bodies has also been marked by the legal battle between the Securities and Exchange Commission (SEC) and Binance.US. The crypto exchange has recently revealed it drastically reduced its workforce and faced a severe revenue drop following an SEC Temporary Restraining Order.
