New York Attorney General Letitia James has expanded the state’s lawsuit against Digital Money Group, tripling the estimated size of the alleged fraud to more than $3 billion.
After the continued investigation, James Secretariat said it learned more investors had been defrauded, resulting in an additional $2 billion in lost assets. name It was released on Friday. The lawsuit hinges on a cryptocurrency lending program called Gemini Earn.
“Initial lawsuits primarily focused on the losses suffered by individual investors participating in the Gemini Earn investment program, but as complaints mounted, the complex nature of the fraud revealed that other investors who had donated money directly to DCG affiliates were also defrauded. It became clear: NYAG said “Genesis.”
NYAG sued Gemini, Genesis, and parent company DCG in October over the Gemini cryptocurrency lending program. At the time, James said the three organizations defrauded more than 29,000 New Yorkers of more than $1 billion. James too said DCG and Genesis”“We disguised $1.1 billion in losses through a months-long campaign of misstatements, omissions and concealment.”
According to the newly amended complaint, NYAG found that the companies defrauded more than 230,000 investors out of more than $3 billion.
“After months of false promises, we have lifted the curtain and revealed that DCG lied to investors and defrauded them of billions of dollars,” Attorney General James said in a statement. “The fraud and deception is so widespread that more and more people are reporting similar losses.
A DCG spokesperson criticized the news and said the claims made by the company and its CEO, Barry Silbert, would be substantiated.
“There is nothing new here,” a spokesperson said in a statement. :This is the same baseless complaint that was recirculated to create yet another media headline. We will vigorously fight these claims and we will win. DCG has always conducted business lawfully and lawfully. DCG and Barry Silbert will be fully vindicated with their integrity.”
settlement
This comes after Genesis Global Holdco, which filed for bankruptcy protection in January 2022, said in a court filing on Thursday that it had reached a settlement with NYAG. DCG is the company’s parent company.
“After months of intense negotiations, the Debtor and NYAG have reached a resolution to the NY Action,” Genesis said in a document filed with the U.S. Bankruptcy Court for the Southern District of New York. A judge still must approve the agreement.
Genesis Global Holdco last week stable It agreed to pay $21 million in a lawsuit filed by the Securities and Exchange Commission.
The SEC said the Gemini Earn program was an unregistered program. stock It provides a place to raise “billions of dollars” worth of cryptocurrency from thousands of investors. The SEC said Genesis didn’t have enough liquid assets to cover the one-year withdrawal costs for the program, leaving investors out dry. James, of New York, said Genesis hid $1.1 billion in losses.
Updated at 1:10 PM ET to include DCG comments.
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