New York Judge allows Attorney General’s securities fraud case against DCG to proceed

A New York judge determined on April 11 that most of Attorney General Letitia James’ civil securities fraud case against crypto venture firm Digital Currency Group (DCG), its CEO Barry Silbert and former Genesis Global Capital CEO Michael Moro can proceed to trial, according to CoinDesk. The lawsuit, filed in 2023, alleges that DCG and its affiliates, along with crypto exchange Gemini, tried to conceal a $1 billion shortfall in Genesis’ balance sheet after the 2022 collapse of crypto hedge fund Three Arrows Capital. Gemini and Genesis settled with the state, but DCG, Silbert and Moro moved to dismiss the case, arguing that the Gemini Earn program did not involve securities and thus fell outside the law’s scope. The judge disagreed, finding the Attorney General had adequately alleged the program was a security, allowing the case to move forward.