New York’s Attorney General, Letitia James, has extended her legal pursuit against Digital Currency Group (DCG), its CEO Barry Silbert, and Genesis Global Capital, unveiling an additional £2 billion in fraud, thus elevating the total losses incurred by over 230,000 investors to £3 billion.
According to James, the cryptocurrency industry continues to grapple with significant fraud, as highlighted in the initial lawsuit filed against Gemini, Genesis, and DCG.
This lawsuit shed light on misleading representations concerning the Gemini Earn investment programme, culminating in over £1 billion in investor losses.
James remarked, “The fraud and deceit were so expansive that many additional people have come forward to report similar harm.
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.”
The investigations conducted by the Attorney General’s office uncovered a more intricate web of deceit, wherein DCG, through Genesis, allegedly defrauded participants of Gemini Earn and direct contributors to DCG’s affiliate, Genesis.
Initially centred on retail investors engaged in the Gemini Earn programme, the alleged fraud’s scope widened as additional complaints emerged.
The complexity of the scheme involving Genesis and DCG has revealed more victims who suffered losses. This legal action forms part of Attorney General James’ ongoing efforts to instil accountability in the cryptocurrency industry.
Stressing the necessity for robust regulations, James has introduced new cryptocurrency legislation aimed at safeguarding investors in New York.
The lawsuit against DCG is not an isolated incident. The AG has initiated similar actions against companies like CoinEx, Coin Cafe, and Nexo.
Attorney General James has been engaged in legal battles against fraudulent cryptocurrency practices since 2021.
From directing unregistered crypto lending platforms to cease operations to securing multimillion-dollar judgments against companies like Bitfinex, Tether, Coinseed, and CoinEx, James is advocating for the regulation of the crypto sector.
Significantly, the New York Attorney General accused Gemini, Genesis, and DCG of deceitful practices, including concealing losses and misleading investors about the safety of their investments.
The lawsuit alleged that Gemini misled investors regarding the safety of its partnership with Genesis, while Genesis and DCG attempted to conceal significant losses, resulting in substantial financial harm to thousands of investors.