Judge Rules Against Most of DCG’s Motion to Dismiss NYAG’s Civil Securities Fraud Suit

The judge agreed to toss out two of the claims against DCG, its CEO Barry Silbert and Michael Moro, the former CEO of Genesis Global Capital, on the grounds that they were duplicative.

• A New York judge has allowed most of the civil securities fraud case against Digital Currency Group and its executives to proceed to trial.
• Attorney General Letitia James alleges that DCG and others misled investors about Genesis' $1 billion loss linked to the collapse of Three Arrows Capital.

A recent legal development saw a New York judge's decision to allow the majority of the civil securities fraud case against Digital Currency Group (DCG) and its executives, Barry Silbert and Michael Moro, to advance to trial. This ruling comes after Attorney General Letitia James accused DCG of deceiving investors about Genesis' significant financial loss following the collapse of Three Arrows Capital.

Despite settlements reached between the OAG and Gemini as well as Genesis, DCG, Silbert, and Moro opted to contest the allegations vigorously. In response to motions filed by DCG and its executives last year seeking dismissal of the suit on grounds of lacking viable claims under New York State securities laws, the presiding judge dismissed some claims but allowed the core securities fraud case relating to Gemini Earn program to move forward based on current allegations.

The judge's ruling acknowledged that there were sufficient grounds for a trial regarding the status of the Gemini Earn program as a security. However, in a fairness gesture, two out of multiple claims brought forward by Letitia James against DCG, Moro, and Silbert were deemed repetitive and eliminated from consideration.

While this legal battle moves towards trial as per the recent decision, DCG remains resolute in their stance to continue their fight against these accusations.

Though Crane ruled the case can proceed, DCG said it isn’t done fighting.