New York Attorney General Letitia James on Friday expanded her case against Digital Currency Group and other crypto defendants, tripling the size of the fraud scheme to more than $3 billion.
In October, James sued Digital Currency, its Genesis Global Capital unit, and Gemini Capital, an exchange run by twin brothers Cameron and Tyler Winklevoss.
She alleged that she misled investors about the Gemini Earn program, which allows customers to lend crypto assets to Genesis in exchange for a high rate of return, causing losses of more than $1 billion.
The attorney general said that as more investors came forward, “the fraud perpetrated by DCG through Genesis” also ensnared investors who sent money directly to Genesis and were falsely convinced that their funds were safe. said it has become clear.
James is seeking more than $3 billion in damages from more than 230,000 investors who are believed to have been defrauded.
“This illegal cryptocurrency scheme and the horrific economic losses suffered by real people are yet another reminder of why we need stronger cryptocurrency regulation to protect all investors,” James said. said in a statement.
Representatives for DCG, Genesis, and Gemini did not respond to requests for comment.
DCG CEO Barry Silbert and former Genesis CEO Soichiro Moro are also defendants.
Genesis filed for bankruptcy in January 2023, two months after halting withdrawals by Gemini Earn customers following the collapse of Sam Bankman Fried’s cryptocurrency exchange FTX.
Both Genesis and Gemini were also sued by the Securities and Exchange Commission for allegedly circumventing disclosure requirements meant to protect Gemini Earn customers.
Genesis last week agreed to pay a $21 million fine to the SEC, provided it can repay customers in full through bankruptcy proceedings. Meanwhile, Gemini sued DCG over a failed crypto lending partnership.