Venture capital firm Digital Currency Group (DCG) and its CEO Barry Silbert have filed motions to dismiss a $3 billion lawsuit filed by the New York Attorney General’s Office (NYAG), arguing that the fraud allegations are baseless.
In October 2023, the NYAG filed a lawsuit against crypto firms Gemini, Genesis and DCG for allegedly defrauding 230,000 investors, including 29,000 New Yorkers, with the Gemini Earn investment program. The NYAG claims that the companies defrauded New York citizens and lied about the investment program.
On Feb. 8, DCG subsidiary Genesis settled with the NYAG. However, just a day later, the NYAG filed a new and expanded complaint against DCG and included Genesis as one of the defendants. Following the filing, DCG filed an objection to the settlement reached by Genesis and the NYAG on Feb. 21.
On March 6, DCG and Silbert made a statement denying the allegations from the NYAG. In addition, the DCG and Silbert filed motions to dismiss the lawsuit, describing the allegations as “baseless innuendo, blatant mischaracterizations, and unsupported conclusory statements.”
Related: Genesis bankruptcy plan overpays customer claims, DCG says
DCG believes the facts will show that the company “did nothing wrong” should the case proceed. Furthermore, DCG said it acted with the best intentions, following the advice of many professionals with the “highest of reputations.” It stated:
“In search of a headline-worthy scapegoat for losses caused by others, the NYAG wrongfully seeks to portray DCG’s good-faith support of Genesis as participating in fraud.”
DCG also countered the NYAG’s allegations against the firm, claiming they had created a liquidity crunch. The venture capital firm said it invested hundreds of millions into Genesis after the Three Arrows Capital (3AC) collapse. DCG said this was in addition to the $1.1 billion promissory note, which they described as a binding obligation vetted and endorsed by advisers, accountants and the firm’s board of directors.
“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,” DCG added.
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