Furthermore, it is alleged that in February 2022, Gemini revised its estimate of Genesis’ credit rating, downgrading it from the investment-grade BBB to the junk-grade CCC, all while failing to publicly inform investors of this change. The lawsuit also claims that Gemini continued to promote correlated investments as “low-risk” despite this credit rating downgrade. Additionally, there are allegations that many of the company’s risk assessors withdrew their own funds from Gemini Earn without disclosing this to investors.
Intriguingly, more than 60 percent of Genesis’ financials are said to have been linked to Sam Bankman-Fried’s embattled hedge fund, Alameda Research. This connection between Gemini and Genesis bears similarities to the ties between FTX and Alameda Research.
In response, Gemini took to Twitter to refute the allegations, asserting that it was a victim of fraud committed by Genesis and DCG. Notably, the firm did not comment on what it knew about Genesis’s financial condition and when it was aware of it, instead placing the blame on Genesis CEO Moro and DCG founder Silbert.
