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New York attorney general expands crypto lawsuit, sees $3 billion fraud


Expanding the lawsuit against Digital Currency Group (DCG), its Genesis Global Capital unit, and Gemini Trust to over $3 billion is a significant escalation in the legal action initiated by New York Attorney General Letitia James. The lawsuit alleges a fraudulent scheme that misled investors regarding the Gemini Earn program, resulting in substantial losses.

In October, Attorney General James initially sued DCG, Genesis Global Capital, and Gemini Trust, alleging over $1 billion in losses caused by deceptive practices related to the Gemini Earn program. This program allowed customers to lend cryptocurrency assets to Genesis in exchange for promised high returns.


The expanded lawsuit indicates that as more investors came forward, it became apparent that the alleged fraud extended beyond the Gemini Earn program. Investors who directly sent money to Genesis were also reportedly misled about the safety of their investments.

This development underscores the seriousness of the allegations and highlights the potential risks associated with deceptive practices in the cryptocurrency industry. It also emphasizes the importance of regulatory oversight to protect investors and maintain trust in the market.


As the legal proceedings continue, it will be crucial to monitor how this case unfolds and its implications for both the defendants and the broader cryptocurrency sector.


The addition of retail customers, including individuals such as a chiropractor and a stay-at-home father, who each invested substantial sums with Genesis, underscores the widespread impact of the alleged fraud. New York Attorney General Letitia James is seeking restitution of over $3 billion for more than 230,000 investors who she believes were defrauded in this scheme.

Attorney General James emphasized the need for stronger cryptocurrency regulations to protect investors, citing the significant financial losses suffered by real people.


On the other hand, Digital Currency Group (DCG) has labeled the lawsuit as “baseless” and expressed confidence in its position, stating its expectation of prevailing in court. DCG asserts that it has always conducted its business lawfully and with integrity, asserting that it and its CEO, Barry Silbert, will be vindicated.

Meanwhile, Genesis’s bankruptcy filing in January 2023 and subsequent decision to shut down indicate the severity of the situation and the challenges faced by the company in light of the legal action.

As this case unfolds, it will likely continue to draw attention to regulatory oversight in the cryptocurrency industry and its implications for investor protection.

Settlement has been reached in response to fraud claims, contingent upon fulfilling obligations to repay customers through the Chapter 11 bankruptcy process. However, this settlement still requires approval from a bankruptcy judge. The individuals mentioned, such as Barry Silbert and Soichiro Moro, are also involved as defendants in this legal matter. It seems like a complex situation with ongoing legal proceedings and potential financial implications for the parties involved.

The situation involving Genesis, Gemini, and the U.S. Securities and Exchange Commission (SEC) seems quite intricate. Genesis filed for bankruptcy shortly after halting withdrawals by Gemini Earn customers, which occurred following the collapse of Sam Bankman-Fried’s FTX cryptocurrency exchange. Both Genesis and Gemini faced lawsuits from the SEC for allegedly bypassing disclosure requirements meant to protect Gemini Earn customers.

In response to the SEC’s actions, Genesis agreed to pay a $21 million fine last week, with the condition of prioritizing repayment to customers. Meanwhile, Gemini has taken legal action against DCG (Digital Currency Group) concerning their crypto lending partnership, adding another layer of complexity to the situation.

This scenario underscores the challenges and risks inherent in the cryptocurrency industry, particularly regarding regulatory compliance and financial stability. The outcomes of these legal proceedings could have significant implications for all parties involved.


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