Digital Forex Group (DCG) and its CEO Barry Silbert have filed motions to dismiss the $3 billion fraud lawsuit filed by the New York Legal professional Normal’s Workplace (NYAG), arguing that the allegations levied in opposition to 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 purchasers 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 performed in “good religion,” backed by sound recommendation from respected consultants and funding advisors.
Based on the submitting:
“The allegations are a skinny net 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 because of elements past the agency’s management.
The corporate asserted that it went above and past its obligations by injecting tons of of thousands and 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 obscure 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 by way of the crypto market’s challenges in 2022, appearing 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.
Based on 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 trade.”
Moreover, it challenged the NYAG’s reliance on selective quotations from Silbert’s communications — which, when seen in full context, purportedly exhibit his ongoing confidence in Genesis’ monetary well being.
Silbert’s actions, together with the supply of a $1.1 billion promissory notice 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 traders, which is the first argument backing the accusations that the businesses misled traders. The protection added that DCG didn’t imagine these statements had been fraudulent.
Moreover, Silbert’s crew factors out procedural issues, noting the NYAG proceeded with the lawsuit with out listening to Silbert’s testimony — testimony that was delayed because of his little one’s well being points. This transfer, in keeping with Silbert’s protection, underlines the NYAG’s haste and disrespect for a complete investigation.
