Part of the CustodyStress archive of observed Bitcoin custody incidents
CS-01196
The New York Attorney General filed suit alleging that Genesis and Gemini had concealed
ConstrainedCase description
In October 2023, the New York Attorney General filed suit alleging that Genesis and Gemini had concealed more than $1.1 billion in losses from investors who deposited assets through the Gemini Earn program. The lawsuit described how Genesis had hidden its exposure to Three Arrows Capital's collapse from retail customers throughout 2022 while continuing to accept new deposits. Customers who had deposited in mid-to-late 2022 had done so under materially false disclosures and were blocked from funds based on losses they had never been told existed.
Custody context
| Stress condition | Documentation absent |
| Custody system | Exchange custody |
| Outcome | Constrained |
| Documentation | Unknown |
| Year observed | 2023 |
| Country | United States |
Structural dependencies observed
What this illustrates
Nobody had written down how to get back in. That knowledge existed only in the owner's head. Whether full access was ultimately possible is unclear, but significant delay or outside intervention was involved.
Outcome interpretation
Access remained possible, but only with delay, dependence, or significant difficulty.
Source
Publicly Reported
Evidence type
News article
Related cases involving documentation absent
This archive documents observed custody survivability failures. It does not attempt to document all Bitcoin losses or security incidents.
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Framework references
Where Bitcoin Custody Intersects Legal and Fiduciary Authority
Where custody creates gaps in estate planning, fiduciary duty, and professional responsibility.
Professional Scope Boundary Matrix
What each professional or product covers, what they do not, and where gaps form between them.
The Independent Assessment Layer in Bitcoin Custody
How independent diagnostic layers emerge when multiple parties depend on shared infrastructure.
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