The New York Attorney General's office has filed a lawsuit against Genesis Global Capital, Gemini Trust, and Digital Currency Group (DCG) this morning.

The complaint also includes allegations against Soichiro Michael Moro, the former CEO of Genesis, and Barry E. Silbert, the founder and CEO of DCG.

“These cryptocurrency companies lied to investors and tried to hide more than a billion dollars in losses, and it was middle-class investors who suffered as a result,” said New York Attorney General Letitia James in a statement.

Genesis Global Capital was a New York-based lending market that went bankrupt in January. It is one of many Genesis entities.

Gemini is a crypto exchange operated by Tyler and Cameron Winklevoss, and DCG is a large crypto-centric conglomerate that owns a variety of different assets in the industry, including Genesis itself, crypto investment firm Grayscale, and media outlet CoinDesk.

The NYAG lawsuit alleges that the three entities defrauded 232,000 customers for over $1 billion.

"We fully intend to fight the claims and look forward to being vindicated in this case," a DCG spokesperson shared with Decrypt. "We have actively cooperated for months with the Attorney General's investigation in an open and transparent manner. We were blindsided by the filing of the complaint, and there is no evidence of any wrongdoing by DCG, Barry Silbert, or its employees.”

This was allegedly executed via "two distinct fraudulent schemes," labeled throughout the lawsuit as the "Gemini Scheme" and the "DCG Scheme."

The Gemini scheme, the NYAG alleges, saw Gemini misrepresent the creditworthiness of Genesis Global when soliciting users for its Earn program. Before halting withdrawals last year, Gemini offered users yield on their idle cryptocurrencies via the program. To generate that yield, Gemini deposited those holdings with Genesis Global.

"Gemini’s internal risk analyses, however, contradicted its assurances about Genesis Capital," reads the complaint, indicating that Gemini had rerated Genesis' creditworthiness from investment grade to junk grade on one occasion.

Earn users were also allegedly defrauded by the DCG Scheme after the Genesis entities sought to conceal a "structural hole" at Genesis Capital of more than $1 billion following the collapse of Three Arrows Capital–a Singapore-based hedge fund that went bankrupt last year.

The Genesis entities, along with Moro, Silbert, and DCG, then allegedly misrepresented Genesis Capital's financial condition.

"I am shocked by the baseless allegations in the Attorney General's complaint and intend to fight these claims in court," said Silbert in a statement shared with Decrypt. "Honesty and integrity have always been my guiding principles. Last year, my and DCG's goal was to help Genesis weather the storm caused by the collapse of Three Arrows and position Genesis for success going forward. It is unfortunate that this lawsuit omits that fundamental fact."

The lawsuit comes amid a public spat between the Winklevoss twins and DCG's CEO Barry Silbert over money owed.

In January, Gemini CEO and co-founder Cameron Winklevoss went as far as demanding Silbert step down as CEO, calling him "unfit" to run DCG.

Silbert fired back the same day, calling the move  “another desperate and unconstructive publicity stunt” designed to deflect blame from himself and Gemini."

The NYAG did not immediately respond to Decrypt's request for comment.

Edited by Stephen Graves.