The first lawsuit, which was filed in October, accused Genesis, its parent company DCG, its former CEO Soichiro Moro, and DCG CEO Barry Silbert of misleading investors and the public by attempting to hide losses of more than $1.1 billion that the investors had to bear.

According to AG James, the lawsuit was modified after additional DCG investors came forward and said they had been mislead about the security of their assets.

Attorney General James states, "We pulled back the curtain and revealed that DCG was lying to investors and defrauding them out of billions after months of false promises." "So widespread were the fraud and deceit that numerous other people have come forward to report harm comparable to this."

The lawsuit concerns the dissolution of Gemini and DCG unit Genesis's collaboration on the former's Earn interest-bearing product. Assets held by customers were frozen in 2022 when Genesis stopped accepting withdrawals in the wake of the FTX bankruptcy.

According to the lawsuit, Gemini misled investors about Earn by telling them again and over again that investing with Genesis through the program was a low-risk decision, even though the company's financials were dangerous according to its own internal evaluations.

According to the lawsuit, Gemini concealed from investors that it was aware that Genesis' loans were poorly secured and that they were formerly heavily concentrated with one company, Sam Bankman-Fried's Alameda.

The AG claims that in an attempt to hide their losses following loan defaults totaling over $1.1 billion, Genesis, DCG, and their management signed a $1.1 billion promissory note, whereby DCG promised to pay Genesis $1.1 billion over the course of ten years at a one percent interest rate.

According to the lawsuit, DCG employed Genesis as a front company and utilized the promissory note as part of a fraud plan to mislead investors and the public about Genesis' financial standing and operational capabilities.