- New York Attorney General Letitia James has expanded her legal pursuit against Digital Currency Group (DCG), CEO Barry Silbert, and Genesis Global Capital
- James’ office has added an additional $2 billion in fraud claims
- The amended complaint now discloses a total of $3 billion in losses suffered by over 230,000 investors.
New York Attorney General (NYAG) Letitia James has expanded her legal pursuit against Digital Currency Group (DCG), CEO Barry Silbert, and Genesis Global Capital, by adding an additional $2 billion in fraud. This comes after an initial lawsuit filed last year, which highlighted misleading representations regarding the Gemini Earn investment program, resulting in over $1 billion in losses for investors. The amended complaint now exposes a total of $3 billion in losses suffered by more than 230,000 investors.
More Complaints Means Higher Losses
James alleged in October that the “DCG Scheme” was connected to operations involving Genesis Capital’s financial state concealment, with more than $1 billion in deficits following the bankruptcy of Three Arrows Capital, the Singapore-based hedge fund that went bust in June 2022. She also accuses Genesis of failing to adequately audit Three Arrows Capital, which would have alerted it to the hedge fund’s deficiencies.
The complex scheme allegedly impacted participants in the Gemini Earn program operated by the Gemini exchange and direct contributors to DCG’s affiliate Genesis. Initially focusing on retail investors participating in Gemini Earn, the scope of the alleged fraud has expanded following additional complaints.
An investigation by her office found that Gemini lied to investors about Gemini Earn, which she said repeatedly assured investors was a low-risk investment.
The reason for the huge increase in alleged losses is due to a huge number of people coming forward following the lawsuit, which now numbers some 230,000.
James’ office James’ action is part of her effort to bring accountability to the cryptocurrency industry, which has seen multiple firms fined and prevented from operating in the state, including CoinEx, Coin Cafe, and Nexo.