New York Attorney General Letitia James expanded the civil lawsuit against Gemini and Digital Currency Group from $1 billion to $3 billion in restitution.
New York Attorney General Letitia James expanded the civil lawsuit against Gemini, Genesis Global Capital, and its parent company, Digital Currency Group (DCG). James previously sought $1 billion in restitution for the thousands of defrauded investors and is now seeking an additional $2 billion.
James Ups Civil Claims
Attorney General James filed suit against Gemini, Genesis Global Capital, and its parent company, DCG, in October 2023. Former Genesis CEO Soichiro Moro and DCG founder and CEO Barry Silbert were also named in the suit. James alleges the firms defrauded investors out of more than $1 billion and is now seeking an additional $2 billion to compensate the victims of the fraud.
According to reports by Forbes and Fox Business, dozens of additional investors have come forward to share their losses since the initial lawsuit was filed.
The revised complaint now includes over 230,000 investors claiming to have been defrauded by Gemini and Genesis. Gemini is operated by billionaire twins Tyler and Cameron Winklevoss, while Genesis is DCG’s bankrupt crypto lending arm. Investors claim Genesis and Gemini defrauded them after they failed to disclose the risk associated with their joint crypto investing program, Gemini Earn.
In a statement, Ms James said:
“After months of false promises, we pulled the curtain back and revealed that DCG was lying to investors and defrauding them out of billions. 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.”
Newly Filed Complaint Extends Beyond Earn Program
The Attorney General added that while the initial lawsuit focused on losses associated with the Gemini Earn program, the revised complaint includes losses by investors directly investing in Genesis.
The SEC sued Gemini and Genesis for selling unregistered securities through its “Earn” product. According to the SEC, Gemini’s Earn program, supported by Genesis’ lending activities, met the Commission’s definition of security by including both an investment contract and a note.
However, Genesis recently settled with the SEC and agreed to a $8 million penalty to New York regulators and surrendering its New York Department of Financial Services (NYDFS) license to operate.
Per Fox’s report, DCG said that James’ lawsuit was “baseless” and expects to win. The company added:
“DCG has always conducted its business lawfully and with integrity, and DCG and Barry Silbert will be fully vindicated.”
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
