Bitcoin Flirts With $30,000 | New York Sues DCG, Genesis And Gemini

On Monday, an erroneous report by Cointelegraph that BlackRock’s application had won the Securities and Exchange Commission’s approval pushed the digital asset above $30,000 on some exchanges. 

BlackRock denied the report but bitcoin was up 10% for the week as of Friday afternoon, according to CoinGecko, on analysts’ bullish outlooks. JPMorgan said approval could come “within months.” James Seyffart of Bloomberg Intelligence said he expects a batch of spot bitcoin ETFs to be approved by January.

Bitcoin’s rise helped spur a broader crypto rally. See the table below.

The action claims that Gemini, run by the Winklevoss twins Cameron and Tyler, lied to investors about its investment program Gemini Earn, which it operated with crypto lender Genesis, a subsidiary of Digital Currency. Gemini failed to disclose the risks of the Earn program despite knowing that Genesis’ loans were undercollateralized and heavily concentrated with Sam Bankman-Fried’s Alameda Research, according to the complaint.

The suit also charges former Genesis CEO Soichiro–a.k.a. Michael–Moro and Silbert with trying to conceal the true financial condition of Genesis from the public and Gemini. The state seeks to ban Gemini, Genesis and DCG from the financial investment industry in New York. It also seeks restitution for investors and disgorgement of ill-gotten gains.

The New York action adds to a blizzard of court cases involving the companies. Genesis is operating under bankruptcy court protection after the precipitous drop in cryptocurrencies last year made its business unviable. Gemini took DCG and Silbert to court in August, alleging them of “masterminding” a fraud against Earn users and other creditors. The federal Securities and Exchange Commission has sued Gemini and Genesis for selling the Earn product in the first place. 

Earlier in the week, Peter Easton, a University of Notre Dame accounting professor who was hired by the Department of Justice to trace Alameda and FTX funds, said Bankman-Fried used customer money to buy back Binance’s stake in FTX. Binance CEO Changpeng Zhao said in 2022 his company received more than $2.1 billion of BUSD stablecoins and FTX’s FTT tokens as part of the repurchase.

The trial will resume Thursday, with the DOJ's final witnesses, after which the defense will begin presenting its case–if it chooses to do so. It is still unknown whether Bankman-Fried will testify in his defense.