New York AG Letitia James Files Amended Complaint Against Digital Currency Group, Claiming Billion in Losses for 230,000 Investors

New York AG Letitia James Files Amended Complaint Against Digital Currency Group, Claiming $3 Billion in Losses for 230,000 Investors

News | February 20, 2024 By:

On Friday, February 9, 2024, New York Attorney General Letitia James filed an amended complaint expanding the Office of the Attorney General’s lawsuit against Digital Currency Group (DCG) and its affiliates for defrauding cryptocurrency investors.

According to the amended complaint, Genesis misled over 230,000 additional investors and caused them losses totaling over $3 billion. This is significantly more than the $1 billion in losses claimed in the original lawsuit filed in October 2023 against DCG, Genesis, and cryptocurrency exchange Gemini Trust Company.

Attorney General James stated that the expanded investigation revealed that Genesis made risky loans with client funds but marketed the investment program called Gemini Earn as low-risk. When Genesis defaulted on over $1.1 billion in loans, DCG and company executives allegedly tried to conceal the losses through an unusual promissory note agreement. The note had DCG repaying Genesis $1.1 billion over 10 years at a mere 1% interest rate.

The original complaint focused on losses by individual investors using the Gemini Earn platform. However, more victims have since come forward reporting they gave funds directly to Genesis, which Attorney General James says shows the “complicated nature” of the deception scheme. The amended suit now seeks over $3 billion in restitution.

Attorney General James has been cracking down on unregulated activity in the cryptocurrency space, pursuing various enforcement actions against unregistered platforms totaling over $50 million in penalties and restitution. This includes prior cases against CoinEx, Coin Cafe, Nexo, Celsius, GTV Media, and others.

The amended complaint is the latest step by Attorney General James to protect New York investors from deceptive practices in the cryptocurrency market. As the case proceeds through litigation, it provides an important look into failures of transparency and oversight enabling such a large scam to take place impacting hundreds of thousands of victims.

Please contact BlockTribune for access to a copy of this filing.