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NYAG Expands Fraud Lawsuit Against DCG, Genesis, and Gemini – Unchained

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The New York Attorney General’s office now says the group defrauded customers and institutions of more than $3 billion, up from the initial charges of $1 billion.

New York Attorney General Letitia James (Shutterstock)

New York Attorney General Letitia James has brought cases against a number of crypto companies in the past.

(Shutterstock)

Posted February 9, 2024 at 11:45 am EST. Updated February 9, 2024 at 12:04 pm EST.

New York Attorney General Letitia James on Friday expanded the fraud lawsuit against crypto-focused VC firm Digital Currency Holdings, its Genesis Global Capital unit, and crypto exchange Gemini, increasing the size of their alleged scheme from $1 billion to $3 billion.

The victims of the fraud are now alleged to include Genesis’ own customers, and not just customers of Gemini’s Earn program, which was run in conjunction with Genesis.

Reuters first reported on the news.

The news of the expanded lawsuit comes a day after Bloomberg reported that Genesis had agreed to settle its case against the Attorney General’s office. It was not immediately clear how the amended lawsuit related to that settlement.

In October, James sued the group, alleging that a program called Gemini Earn that allowed customers to lend crypto assets to Genesis for a generous rate of return misled investors with false assurances that their funds were safe. The AG’s office has now said that more investors have since come forward, leading to an additional $2 billion in assets that were lost. In total, the AG’s office said that more than 230,000 investors were defrauded.

Among those additional investors that came forward were people who sent their money directly to Genesis, the Attorney General’s office said.

“After months of false promises, we pulled the curtain back and revealed that DCG was lying to investors and defrauding them out of billions,” said Attorney General James in a statement“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.”

James’ office has brought numerous cases against crypto companies and executives in the past, including CoinEx, Coin Cafe, and the former CEO of Celsius.

UPDATE (Feb. 9 12:04 pm ET) Updated with details throughout. 

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