Specifically, it’s not just for losing money, but for lying to investors about the level of risk in those investments. The lawsuit claims the companies knew the investments were risky and led investors to believe they were safe.
I feel the onus is slightly on the customer here because pretty much everyone knows that crypto is extremely unstable, and if you didn’t know that, but just threw money at it because people told you, that’s your fault.
Last November, Gemini paused withdrawals from its Earn program in the wake of the FTX collapse, preventing customers from accessing their funds. The New York Post reported in September that the Winklevoss twins allegedly withdrew $280 million from Genesis before the firm ultimately collapsed.
Additionally, James is suing Genesis and its DCG parent company for allegedly trying to cover up over $1 billion in losses.
That’s a bit more than “buyer beware.”
Now do the stock market. I’ll wait.
Its always stories like this that come to mind anytime someone excuses wealth with, “they deserve it because they took the risk”. Whenever that risk doesnt go their way, the government bails them out.
That’s it what the lawsuit is about here. It was the fraudulent misrepresentation of the investments that was illegal.
I dont believe for a second anyone thought these werent risky investments.
Every day New Yorkers and Americans lost millions, including their entire lifesavings.
Look, I hope these people get their money back cause this sounds messed up, but maybe also don’t invest money that you can’t afford to lose. ESPECIALLY when it comes to crypto.
Maybe don’t invest in pyramid schemes?
Ok where do I invest my money then? Its very difficult for the working class to put their money anywhere safe and have it earn anything. The market drove people to those risks before some rich people figured out that getting into crypto exchanges would help them profit off of that risk taking financial decision.
Ok where do I invest my money then?
Well-diversified mutual funds, or something equivalent to that, and in particular you want a mixture of asset classes such as stocks and bonds. You also want to have a hierarchy of investments, ranging from very low-risk but also low-growth investments for your emergency savings that you can tap at a moment’s notice to high-risk but also high-growth investments for savings that you do not need to tap for a long time (such as for retirement, assuming that is far off). “High-risk” in this context doesn’t mean “risk of your investment disappearing” so much as “risk of your investment suffering from a dip in value at the time when you need it”.
But to reiterate: the most important thing here is diversification, because diversification means that some of your investments can drop in value by a lot or even become worthless without causing you to lose everything. Putting all of your money into a single asset or kind of asset, such as a cryptocurrency, is basically the opposite of what you want to be doing.
