Odaily Planet Daily News: The New York Attorney General's Office filed a motion to oppose the motion to dismiss the fraud case filed in March by Digital Currency Group (DCG), founder and CEO Barry Silbert, and Soichiro "Michael" Moro, former CEO of Genesis, a wholly-owned cryptocurrency trading unit of DCG. In addition to Gemini, the New York Attorney General's Office also accused Genesis, DCG, Silbert and Moro of jointly covering up a $1 billion gap on Genesis' balance sheet, which was caused by the collapse of Singapore's crypto hedge fund Three Arrows Capital (3AC). At the time of Genesis' bankruptcy, 3AC was its second-largest borrower. According to Letitia James's lawsuit in October last year, Genesis and DCG made "false assurances" on X, saying that DCG had assumed Genesis' losses in order to reassure investors and prevent them from recovering outstanding loans. But instead of actually covering Genesis’ losses, DCG allegedly simply wrote its subsidiary a promissory note — essentially an IOU designed to create the appearance of liquidity — promising to pay Genesis $1.1 billion over 10 years at a 1% interest rate. James alleges in the lawsuit that DCG “never made a single payment under the note.” In November 2022, Genesis stopped taking withdrawals and declared bankruptcy two months later. DCG and Silbert deny that the promissory note was a fake. In a motion seeking to dismiss the lawsuit, DCG and Silbert’s lawyers claim that the note was fully vetted and binding, adding that in addition to the note, DCG transferred hundreds of millions of dollars and assets to Genesis to fill holes in its balance sheet. They argue that the X-Postings, which reassured investors about Genesis’ “strong” balance sheet, were just “corporate propaganda” and not lies. James’ latest motion argues that the posts are not simple promotional language, but rather “false statements of existing facts” intended to “mislead the investing public” — a violation of New York’s strict anti-fraud law, the Martin Act. (CoinDesk)