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New York Attorney General Letitia James has significantly escalated her legal action against Digital Currency Group (DCG) and other cryptocurrency entities, tripling the alleged fraud scheme’s size to over $3 billion.
In October, James initially sued DCG, its Genesis Global Capital unit, and Gemini Trust, headed by Cameron and Tyler Winklevoss, alleging over $1 billion in losses from misleading investors regarding the Gemini Earn program.
Misleading Investors:
James asserts that the fraudulent activities extended beyond the initial claims, now encompassing direct investments made to Genesis, with more investors, including retail customers, affected.
The Attorney General seeks restitution exceeding $3 billion for over 230,000 defrauded investors, emphasizing the necessity of stringent cryptocurrency regulations to safeguard investors.
DCG’s Response:
DCG categorically denies the allegations, deeming James’ lawsuit baseless and expressing confidence in prevailing in court while reaffirming its commitment to lawful and ethical business practices.
Genesis Bankruptcy and Settlement:
Genesis, amid bankruptcy proceedings since January 2023, has settled with James’ office, agreeing to repay customers through Chapter 11 bankruptcy, contingent on court approval.
Genesis and Gemini faced regulatory scrutiny from the U.S. Securities and Exchange Commission (SEC) for allegedly bypassing disclosure requirements, with Genesis recently agreeing to a $21 million fine.
Ongoing Legal Battles:
Gemini, in turn, has initiated legal action against DCG concerning their failed crypto lending partnership, marking another chapter in the convoluted legal saga surrounding the cryptocurrency industry.
