Ellison, ex-girlfriend of FTX co-founder Sam Bankman-Fried, outlined for a New York jury Wednesday how she worked with Sam Bankman-Fried to deceive lenders and customers to build his multi-billion dollar cryptocurrency empire, and their failed attempts to prevent a spectacular collapse. Crypto advocates argue that regulators have dragged their feet in establishing guidelines for digital assets, which they believe are distinct from traditional securities like stocks or bonds.Ĭaroline Ellison, former chief executive officer of Alameda Research LLC, exits court in New York, US, on Thursday, Oct. James’ lawsuit is the latest effort among US officials to crack down on the trillion-dollar crypto industry, which for years has operated in the shadows of traditional financial regulation. “And it was middle-class investors who suffered as a result.” At least 29,000 New Yorkers were among the 230,000 investors whose money was lost, James said. “These cryptocurrency companies lied to investors,” Attorney General Letitia James said in a statement. The program, called Gemini Earn, marketed itself as a low-risk investment in which customers could lend crypto assets to Genesis while earning interest payments as high as 8%. The AG’s office said that an investigation found Gemini, the crypto firm founded by Cameron and Tyler Winklevoss, deceived investors about significant risks associated with a lending service it ran jointly with Genesis. The lawsuit accused the companies of lying to investors and covering up more than $1 billion in losses. On Thursday, New York’s attorney general filed a lawsuit against three digital asset firms that were caught up in the collapse of Bankman-Fried’s empire last fall - Gemini Trust, Genesis Global Capital and Digital Currency Group, parent company of Genesis. The fallout from the colossal implosion of Sam Bankman-Fried’s crypto business is still rippling through the digital asset industry nearly a year later.
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