- November 1, 2023
- Posted by: admin
- Category: BitCoin, Blockchain, Cryptocurrency, Investments
Digital Currency Group (DCG) has hired acclaimed trial attorney Barry Berke to confront a civil lawsuit filed by New York Attorney General Letitia James against the company and its founder, Barry Silbert, according to a press release.
Berke, a partner and chair of the litigation department at Kramer Levin, is renowned for his litigation expertise and has previously represented an array of clients ranging from Fortune 500 corporations to tech startups.
Chief impeachment counsel
DCG argues that the lawsuit filed by the NYAG lacks merit as the firm has always tried to act with integrity in the industry. Berke echoed these sentiments, adding that the lawsuit ignores DCG’s genuine efforts to advance its subsidiaries and the wider industry. He stated:
“This misguided and meritless lawsuit proves the adage that ‘no good deed goes unpunished.’ We look forward to demonstrating that DCG and Barry Silbert should never have been sued.”
Berke’s illustrious career speaks volumes about his expertise. He has been described by Chambers USA as “one of the foremost litigators in the U.S.” and has received unanimous praise for his adept handling of high-stakes proceedings.
Berke’s past association with U.S. political circles is noteworthy. He acted as chief impeachment counsel for the U.S. House of Representatives in its impeachment case against former President Donald Trump. Additionally, his representation of former New York City Mayor Bill de Blasio in multiple federal and local probes further solidifies his position as a top-tier legal strategist.
Legal troubles
The NYAG’s lawsuit was filed on Oct. 19 and targets DCG, its unit Genesis, and crypto exchange Gemini over not informing investors about the potential risks of a crypto-lending program the three launched in collaboration in 2021.
The NYAG’s office posits that this lack of transparency led to customer fraud amounting to a staggering $1.1 billion.
The NYAG’s investigation discovered that Gemini, in collaboration with Genesis, represented their “Gemini Earn” program as a low-risk investment. However, internal analysis demonstrated that Genesis’ finances were far riskier than portrayed.
Moreover, there were concerns about Genesis’ loans being inadequately secured, with a significant concentration tied to Sam Bankman-Fried’s Alameda Research. Despite this, Gemini kept investors in the dark.
The lawsuit further accuses Genesis, its former CEO Soichiro Moro, parent company DCG, and DCG’s CEO Barry Silbert of deceit. Allegedly, they attempted to hide losses exceeding $1.1 billion, which investors ultimately shouldered.
Gemini, headquartered in New York, had initiated the “Gemini Earn” program in February 2021 with Genesis. Despite internal concerns regarding the risk associated with Genesis, including comparisons of its financial state to that of Lehman Brothers before its collapse, the company continued promoting the program.
Genesis and DCG are also under scrutiny for concealing over $1.1 billion in losses. Notably, in June 2022, Genesis faced massive defaults from its major borrowers, including Three Arrows Capital and Babel Finance. To mask these losses, DCG and Genesis formulated a $1.1 billion promissory note. Public announcements from both companies during this period falsely painted a rosy picture of their financial health.
The endgame for Attorney General James through this litigation is to permanently prohibit the accused firms and their executives from any securities and commodities dealings in or from New York. She also aims to ensure the return of defrauded investors’ money and the confiscation of any illegal profits.
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