Digital Currency Group (DCG), venture capital firm, and its CEO Barry Silbert have filed motions to dismiss the New York Attorney General’s Office (NYAG) $3 billion lawsuit, arguing that the allegations of fraud are without merit.
The NYAG initiated legal proceedings in October 2023 against cryptocurrency firms Gemini, Genesis, and DCG because they purportedly defrauded 230,000 investors, 29,000 of whom were New Yorkers, through the Gemini Earn investment program. The NYAG asserts that the corporations misled New York residents and defrauded them regarding the investment program.
NYAG and DCG subsidiary Genesis settled on February 8. The following day, however, the NYAG filed an expanded complaint against DCG in which Genesis was named one of the defendants. DCG subsequently objected to Genesis and the NYAG’s settlement on February 21.
On March 6, DCG and Silbert issued a joint statement that refuted the NYAG’s allegations. Furthermore, Silbert and the DCG both submitted motions to dismiss the litigation, criticizing the allegations as consisting of “baseless innuendo, blatant mischaracterizations, and unsupported conclusory statements.”
According to DCG, the facts will demonstrate that the company “did nothing wrong” should the lawsuit proceed. Furthermore, DCG stated that it acted in good faith, following the counsel of many experts regarded as having “the highest reputations.” The statement read:
“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.”
In addition, DCG refuted the NYAG’s allegations against the firm by asserting that it was responsible for the liquidity crisis. Upon the bankruptcy of Three Arrows Capital (3AC), the venture capital firm reportedly invested hundreds of millions in Genesis. DCG stated that this was in addition to the $1.1 billion promissory note, which they characterized as a legally binding obligation that the firm’s board of directors, advisers, and accountants had reviewed and approved.
“We look forward to putting this matter to rest as we concentrate on the enormous growth opportunity in our industry beyond 2024,” DCG continued. “We will continue to contest these claims vigorously.”
