New York Attorney General Expands Lawsuit Against Digital Currency Group
New York Attorney General Letitia James has filed an amended lawsuit against Digital Currency Group (DCG), accusing the company of defrauding investors in its relationship with Genesis and Gemini Earn. The AG alleges that DCG, along with CEO Barry Silbert and ex-Genesis CEO Soichiro Moro, defrauded additional individuals and institutions of $2 billion.
Genesis Fraud Exceeds Initial Estimates
The initial lawsuit, filed in October, claimed that Gemini, DCG, and Genesis misled investors about the risks associated with the Gemini Earn platform. Genesis, which managed customer deposits, went bankrupt, resulting in losses for Gemini customers. The amended filing now states that more investors were affected than previously thought, bringing the total damages up to $3 billion.
In a statement, Attorney General James emphasized the need for stronger cryptocurrency regulations to protect investors.
Inclusion of Institutional Investors
The amended lawsuit also includes input from institutional investors who directly contributed funds to Genesis. This expands the scope of harm beyond retail investors.
Attorney General’s History in Crypto Regulation
Attorney General James has a track record of cracking down on the crypto industry. In 2021, she directed Bitfinex and Tether to cease trading activity in New York and ordered unregistered crypto-lending platforms to halt illegal operations in the state. She has also secured settlements and levied fraud charges against other crypto firms.
James was one of the first politicians to allege that Ether (ETH) is an unregistered security. The regulatory status of ETH remains uncertain as the U.S. Securities and Exchange Commission has not provided a clear verdict.
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