Digital Currency Group (DCG) and its CEO Barry Silbert have filed motions to dismiss the $3 billion fraud lawsuit filed by the New York Legal professional Common’s Workplace (NYAG), arguing that the allegations levied towards them are “baseless innuendo.”
The NYAG filed the lawsuit in October 2023 over allegations that DCG and its subsidiary Genesis Capital misled clients concerning the dangers concerned with the Gemini Earn program, inflicting losses for patrons to the tune of $3 billion.
Genesis has already agreed to settle the lawsuit individually. In the meantime, DCG has additionally filed an objection to the settlement.
DCG denies allegations
DCG has categorically denied the NYAG’s allegations, framing them as baseless and missing substantial proof. The corporate argued that its help for Genesis Capital was carried out in “good religion,” backed by sound recommendation from respected consultants and funding advisors.
In response to the submitting:
“The allegations are a skinny internet of baseless innuendo, blatant mischaracterizations, and unsupported conclusory statements.”
In its protection, DCG contends that the allegations are a misguided try by the NYAG to discover a scapegoat for the losses suffered by clients resulting from components past the agency’s management.
The corporate asserted that it went above and past its obligations by injecting a whole bunch of hundreds of thousands of {dollars} into Genesis Capital within the lead-up to its chapter submitting.
The authorized paperwork additional element the character of the communications made by DCG and Genesis Capital, together with retweets and statements deemed too imprecise to represent fraud. The agency additionally challenged the applicability of New York’s Martin Act to its actions, arguing that the authorized framework doesn’t help the NYAG’s case.
‘Kitchen-sink strategy’
On the coronary heart of the protection is the assertion that Silbert was totally dedicated to supporting Genesis via the crypto market’s challenges in 2022, performing with none fraudulent intent.
The protection criticized the NYAG for using a “kitchen-sink” strategy — accusing it of grouping Silbert unjustly with different defendants and basing its case on improper group pleading.
In response to the submitting:
“Mr. Silbert is a number of steps faraway from the alleged fraud, but the Amended Grievance seeks to carry him personally liable and completely bar him from the securities business.”
Moreover, it challenged the NYAG’s reliance on selective quotations from Silbert’s communications — which, when considered in full context, purportedly reveal his ongoing confidence in Genesis’ monetary well being.
Silbert’s actions, together with the supply of a $1.1 billion promissory be aware to Genesis, are highlighted as proof of his perception within the firm’s viability and his accountable oversight as CEO.
The protection additionally claims that he and DCG had nothing to do with the assertion Genesis made to buyers, which is the first argument backing the accusations that the businesses misled buyers. The protection added that DCG didn’t consider these statements have been fraudulent.
Moreover, Silbert’s workforce factors out procedural issues, noting the NYAG proceeded with the lawsuit with out listening to Silbert’s testimony — testimony that was delayed resulting from his baby’s well being points. This transfer, in accordance with Silbert’s protection, underlines the NYAG’s haste and disrespect for a complete investigation.
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