In a newly amended complaint, New York State Attorney General (AG) Letitia James alleges that investment giant Digital Currency Group (DCG) and its affiliate Genesis defrauded some 230,000 investors out of more than $3 billion.
James first launched the lawsuit in October 2023, alleging that DCG, the crypto exchange Gemini and the bankrupt lending firm Genesis attempted to conceal $1.1 billion in losses and “repeatedly lied” to their investors.
An investigation found that Gemini lied to investors about the risks of its Gemini Earn program, which aimed to provide customers with yield on their crypto assets. Gemini partnered with Genesis to facilitate the service.
Genesis went bankrupt last year and owed $735 million to members of the Earn program during its collapse.
In a new press release, the New York AG says that after the initial lawsuit was announced, more investors have come forward, forcing them to revise their initial number.
“After months of false promises, we pulled the curtain back and revealed that DCG was lying to investors and defrauding them out of billions. The fraud and deceit were so expansive that many additional people have come forward to report similar harm. This illegal cryptocurrency scheme, and the horrific financial losses that real people have suffered, are yet another reminder of why stronger cryptocurrency regulations are needed to protect all investors.”
The Office of the Attorney General (OAG) finds that “the complicated nature of the fraud” also deceived people who directly invested their funds in DCG’s subsidiary Genesis.
The amended lawsuit directs charges at Genesis, its former CEO Soichiro Moro and DCG CEO Barry Silbert “for defrauding additional individuals and institutions of an additional $2 billion.”
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