NY Attorney General: Digital Currency Group Accused of $3 Billion Fraud
New York State Attorney General Letitia James has filed an amended complaint, alleging that Digital Currency Group (DCG) and its affiliate Genesis were involved in fraudulent activities resulting in losses for approximately 230,000 investors, totaling more than $3 billion.
The initial lawsuit, filed in October 2023, accused DCG, along with the cryptocurrency exchange Gemini and bankrupt lending firm Genesis, of concealing losses of $1.1 billion while providing false information to investors.
An investigation revealed that Gemini had misrepresented the risks associated with its Gemini Earn program, which aimed to provide returns on cryptocurrency assets in partnership with Genesis. Genesis declared bankruptcy the previous year, leaving participants in the Earn program owed a combined $735 million.
Following the initial lawsuit announcement, additional affected investors came forward, leading to a revision of the estimated losses.
According to the Attorney General’s Office, the complex nature of the fraud also affected direct investors in DCG’s subsidiary, Genesis.
The amended complaint alleges that Genesis, its former CEO Soichiro Moro, and DCG CEO Barry Silbert defrauded additional individuals and institutions of approximately $2 billion.