New York Attorney General Triples Fraud Allegations Against DCG to Over $3 Billion

cryptonews.com:

New York Attorney General Letitia James has escalated the state’s legal action against Digital Currency Group (DCG), tripling the estimated size of the alleged fraud to over $3 billion. This development follows a prolonged investigation by James’s office, which uncovered additional investors defrauded of $2 billion in assets, as disclosed in a statement released on Friday. The lawsuit centers on a cryptocurrency lending program known as Gemini Earn.

The initial lawsuit, filed in October, targeted Gemini, Genesis, and DCG over the Gemini crypto lending program, alleging the defrauding of more than 29,000 New Yorkers of over $1 billion. The amended complaint now reveals that the companies allegedly defrauded over 230,000 investors of more than $3 billion. James accused DCG and Genesis of disguising $1.1 billion in losses through a campaign of misstatements, omissions, and concealment.

Attorney General James emphasized the extensive nature of the fraud, stating, “After months of false promises, we pulled the curtain back and revealed that DCG was lying to investors and defrauding them out of billions.” DCG has yet to respond to requests for comment on the matter.

According to the NYAG, the expanded lawsuit encompasses not only losses suffered by retail investors in the Gemini Earn investment program but also other investors who directly contributed funds to DCG’s affiliate, Genesis.

Attorney General James condemned the fraudulent scheme, emphasizing the need for stronger cryptocurrency regulations to protect all investors. The lawsuit highlights instances where Gemini assured investors that investing with Genesis through the Gemini Earn program was low-risk, despite internal analyses showing the financials were risky.

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