Judges’ rules for the majority of DCG claims to dismiss NYAG’s private securities fraud cases

A New York judge ruled on Friday that the majority of New York Attorney General Letia James’ private securities fraud lawsuits could move forward with crypto venture Digital Currency Group (DCG) and its two executives.

In 2023, James sued DCG, Barry Silbert, whose CEO, Barry Silbert, Barry Silbert, now bankrupt ARM Genesis Global Capital, and its former CEO, Michael Moro and Crypto Exchange Gemini.

James said DCG and Genesis had “false assurances” on social media that DCG had absorbed the losses from the collapse of 3AC. DCG has firmly argued that the promissory note is legal, but James’s lawsuit alleges that DCG “has never made a single payment under the memo.”

Gemini and Genesis both settled down with OAG, but DCG, Silvert and Moro have fought with them with teeth and claws. Last spring, DCG and both executives filed an motion to dismiss the case, alleging that the Attorney General’s Office (OAG) failed to state the claim. Essentially, they argue that they don’t sell securities and should not be sued under New York State Securities Act.

However, the judge who will be the main side of the case opposed in ruling Friday, writing that at least at the current stage, he was upset with the Gemini acquisition program, November 2022, and properly argued that Gemini Loan Products, a Gemini loan product at James’ heart, is security.

However, Crane agreed to throw away two of James’ claims against DCG, Moro and Silvert. One claims that they engage in a scheme that fraudulently under New York enforcement law, and the other engages in the allegations that they engage in a fifth conspiracy.

Crane ruled that the case could proceed, but DCG said the fight was not over.

“As mentioned from the beginning, allegations against DCG are a thin web of indications, false characteristics and unsupported conclusions,” a DCG spokesman told Coindesk. “We are encouraged to fire the judges of the New York Attorney General’s most outrageous allegations based on alleged criminal fraud and conspiracy law violations. We will continue to fight this unfounded lawsuit as our focus is on our mission to support the digital asset industry.”