In a newly amended complaint, New York State Attorney General (AG) Letitia James alleges that investment giant Digital Valuta Group (DCG) and its subsidiary Genesis defrauded approximately 230,000 investors out of more than $3 billion.
James first filed the lawsuit in October 2023, alleging that DCG, crypto exchange Gemini and bankrupt lender Genesis tried to hide $1.1 billion in losses and “repeatedly” lied to their investors.
Investigations revealed that Gemini lied to investors about the risks of its Gemini Earn program, which aimed to provide customers with returns on their crypto assets. Gemini partnered with Genesis to facilitate the service.
Genesis went bankrupt last year and owed $735 million to Earn program members during the collapse.
In a new press release, the New York AG says that after the initial lawsuit was announced, more investors came forward, forcing them to revise their original numbers.
“After months of false promises, we pulled back the curtain and revealed that DCG lied to investors and defrauded them of billions. The fraud and deception was so extensive that many more people have come forward to report similar damage. This illegal cryptocurrency scheme and the horrific financial losses suffered by real people are yet another reminder of why stricter cryptocurrency regulations are needed to protect all investors.”
The Office of the Attorney General (OAG) notes that “the complex nature of the fraud” also deceived people who had invested their money directly in DCG’s Genesis subsidiary.
The amended lawsuit charges Genesis, former CEO Soichiro Moro and DCG CEO Barry Silbert “for defrauding additional individuals and institutions of an additional $2 billion.”
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