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Another Temasick's company in trouble


Alfrescian (Inf)
Temasek lost hundreds of millions investing in FTX.

Gemini, DCG sued by New York for alleged $1.5 billion crypto fraud​


The lawsuit accuses Gemini and DCG’s Genesis Global Capital unit of failing to disclose to investors the risks of a crypto lending programme they started in 2021. PHOTO: REUTERS

Oct 20, 2023

NEW YORK – Gemini Trust and Digital Currency Group (DCG) are being sued by New York’s top law-enforcement officer for allegedly defrauding customers of US$1.1 billion (S$1.5 billion), escalating legal woes for two companies hit hard by 2022’s plunge in cryptocurrency markets.
DGC is backed by investors including Singapore sovereign wealth fund GIC.
The lawsuit filed on Thursday by New York Attorney-General Letitia James accuses Gemini, which operated a crypto exchange, and DCG’s Genesis Global Capital unit of failing to disclose to investors the risks of a crypto lending programme they started in 2021. The venture’s assets collapsed in 2022 amid several high-flying bankruptcies, including Sam Bankman-Fried’s FTX.
Ms James said that some investors lost their life savings.
The state said it wants to ban Gemini, Genesis and DCG from the financial investment industry in New York. Ms James is also seeking restitution for investors and disgorgement of the companies’ allegedly ill-gotten gains.
Gemini, founded by brothers Tyler and Cameron Winklevoss, lied to customers about how risky loans were in its venture with Genesis and failed to disclose that at one point, almost 60 per cent of its third-party loans were to Bankman-Fried’s crypto trading firm Alameda Research, the state claims. Genesis and DCG were accused in the suit of trying to conceal spiralling losses.
The claims by New York come after the United States Securities and Exchange Commission in January sued Genesis and Gemini over their failed crypto-lender joint venture, known as Gemini Earn.

Meanwhile, the three firms have also engaged in suing each other in the wake of sector woes. Genesis, which filed for bankruptcy in January, later sued its parent DCG, seeking to recover about US$620 million in outstanding loans. Gemini has also sued DCG, as well as DGC chief executive Barry Silbert, seeking to recover “damages and losses” from alleged “fraud and deception” related to Gemini Earn.
The alleged fraud by the companies is “yet another example of bad actors causing harm throughout the under-regulated cryptocurrency industry”, Ms James said in a statement.
“My office will continue its efforts to stop deceptive cryptocurrency companies, and to push for stronger regulations to protect all investors,” said the Attorney-General, who has sought to position herself as a leading crypto enforcer.

DCG, in a statement, said it has always conducted business “lawfully and with integrity”, and that the company will fight the state’s allegations.
“We have actively cooperated for months with the Attorney-General’s investigation in an open and transparent manner,” DCG said. “We were blindsided by the filing of the complaint, and there is no evidence of any wrongdoing by DCG, Barry Silbert, or its employees.”
Gemini, in a statement posted on X, formerly known as Twitter, applauded the complaint against Genesis and DCG, but said that it wholly disagrees with the Attorney-General’s decision to also sue Gemini.
“Blaming a victim for being defrauded and lied to makes no sense and we look forward to defending ourselves against this inconsistent position,” said Gemini.
Gemini Earn purported to generate as much as 8 per cent interest for Gemini customers by allowing Genesis to lend their crypto assets to third parties. But more than US$1 billion was invested in Three Arrows Capital, a hedge fund that failed in mid-2022, leaving a hole in Genesis’ balance sheet, according to the lawsuit. Around the same time, Genesis lost more than US$100 million from another borrower, Babel Finance, Ms James said.
Genesis is accused in the suit of failing to adequately audit Three Arrows and lying to Gemini when it claimed “to regularly review its borrowers’ financial statements”, Ms James said.
The state’s probe found that no such audit had been performed for more than two years, she said.
In July 2022, Gemini’s board of managers considered ending the Gemini Earn programme due to the Genesis risks, with one board member comparing the company’s financial condition to Lehman Brothers, Ms James said in her statement.
But Gemini “failed to provide its investors with any meaningful warnings about these risks”, she said.
The complaint noted that “Gemini’s chief operations officer, who also sat on Gemini’s Enterprise Risk Management Committee, withdrew his entire remaining Earn investment – totalling more than US$100,000 – on June 16 and June 17, 2022”. The filing did not name the executive. Mr Noah Perlman was Gemini’s chief operating officer from August 2020 till January 2023, according to his LinkedIn profile. He then joined Binance, the world’s biggest crypto exchange, as its chief compliance officer.
Other Gemini risk management personnel withdrew their own investments from Earn between June and September as well, according to the complaint.
During a meeting on Oct 20, 2022, Mr Silbert informed Mr Cameron Winklevoss “that Genesis Capital could not redeem Earn investors’ funds without Genesis Capital declaring bankruptcy”, the complaint said. “Gemini secretly granted Genesis Capital multiple extensions to return investor funds.”
Mr Silbert and former Genesis CEO Michael Moro, both of whom are named as defendants in the suit, are accused of repeatedly lying to investors, as well as to Gemini, about the financial woes. Genesis allegedly hid from Gemini the existence of a US$1 billion promissory note that was created to conceal the extent of its losses, according to the complaint. BLOOMBERG


Alfrescian (Inf)

Bankrupt Genesis sues parent DCG over unpaid loans of more than $832 million​


Digital Currency Group was sued on Wednesday by its bankrupt Genesis Global Capital cryptocurrency lending unit. PHOTO: REUTERS

SEP 7, 2023

NEW YORK - Digital Currency Group (DCG) was sued on Wednesday by its bankrupt Genesis Global Capital cryptocurrency lending unit, as both sides negotiate DCG’s repayment on more than US$610 million (S$832 million) of loans that matured in May.
In a complaint filed in Manhattan bankruptcy court, Genesis is seeking to recoup US$500 million that DCG borrowed under four loans.
It also filed a separate complaint to recover 4,550 bitcoin, worth about US$117 million, owed by the affiliated Digital Currency Group International under a fifth loan.
Genesis said recovering the unpaid sums would offer a “significant benefit” to its bankruptcy estate, but that DCG is “wrongfully in possession”.
In footnotes, Genesis said it is in talks for “partial repayment” by DCG, and intends to stop pursuing the lawsuits if both sides settle.
According to court papers, DCG owes more than US$1.7 billion to Genesis and other debtors.
Genesis filed for Chapter 11 protection from creditors in January, two months after halting withdrawals. DCG, which also owns crypto news website CoinDesk and digital asset manager Grayscale, has not sought bankruptcy protection.

DCG raised US$700 million in November 2021 from prominent investors such as Singapore’s GIC, SoftBank, Ribbit Capital and Alphabet’s CapitalG.
Last Tuesday, Genesis said it reached an agreement in principle with DCG and unsecured creditors, where to satisfy those obligations DCG would pay US$275 million, and take out US$1.16 billion of new credit facilities maturing in two or seven years.
In a statement on Wednesday, DCG said it expects to file a settlement with the bankruptcy court soon.
“At that point, we will initiate the distribution of funds and continue on the path to significant recovery for Genesis creditors,” it said.
Genesis also made large loans to the hedge funds Three Arrows Capital and Alameda Research, which both filed for bankruptcy in 2022.
Alameda’s parent, cryptocurrency exchange FTX, also filed for Chapter 11. US prosecutors have accused FTX’s founder Sam Bankman-Fried of orchestrating a multibillion-dollar fraud. REUTERS


Alfrescian (Inf)
Never underestimate the PAP regime's talent for betting on the wrong horse. :cool:

Now: 'Safe and effective' Covid shots.

Soon: A.I and 'green energy'.


Lol, if in private sector all sacked or jailed, bunch of useless papigs ,they are just normal human beings that cannot survive in private sector,lol,if they are capable they would hv setup on company n because boss, leeches


Never underestimate the PAP regime's talent for betting on the wrong horse. :cool:

Now: 'Safe and effective' Covid shots.

Soon: A.I and 'green energy'.
Carbon Neutral Future when Indon and Jiuhu are burning their forest at God Speed


Alfrescian (Inf)
At the rate our leeserves are burning money, it's just a matter of time before sinkieland follows tiong-cock pattern: no withdrawal of money allowed.