New York Attorney General Letitia James on Friday expanded her lawsuit against Digital Currency Group and other cryptocurrency defendants, tripling the size of their alleged fraud scheme to more than $3 billion.
In October, James sued Digital Currency, its Genesis Global Capital unit, and Gemini Capital, the exchange run by twin brothers Cameron and Tyler Winklevoss.
He claimed they caused more than $1 billion in losses by misleading investors about the Gemini Earn program, which allowed customers to lend crypto assets to Genesis in exchange for a high rate of return.
The attorney general said it had become clear as more investors came forward that “the scam perpetrated by DCG through Genesis” also ensnared investors who sent money directly to Genesis and were falsely assured their money was safe.
James is seeking more than $3 billion in restitution for the more than 230,000 investors he believes were defrauded.
New York Attorney General Letitia James tripled the size of Digital Currency Group’s alleged fraud scheme to more than $3 billion. AP
“This illegal cryptocurrency scheme and the terrible financial losses that real people have suffered are another reminder of why stricter cryptocurrency regulations are needed to protect all investors,” James said in a statement.
DCG said Friday that James’ lawsuit was “baseless” and that it hopes to win in court.
“DCG has always conducted its business lawfully and with integrity, and DCG and Barry Silbert will be fully vindicated,” he said in a statement.
Genesis will close after filing for bankruptcy in January 2023.
On Thursday night, he reached a settlement with James’ office, agreeing to pay his fraud claims as long as he pays clients in full through the Chapter 11 process. That agreement requires approval from a bankruptcy judge.
In October, James sued Digital Currency, its Genesis Global Capital unit, and Gemini Capital, the exchange run by twin brothers Cameron and Tyler Winklevoss. Getty Images for Hauser & Wirth
Representatives for DCG and Gemini did not immediately respond to requests for comment.
Silbert, CEO of DCG, and Soichiro Moro, former CEO of Genesis, are also charged.
Genesis filed for bankruptcy two months after stopping Gemini Earn customer withdrawals following the collapse of Sam Bankman-Fried’s FTX cryptocurrency exchange.
Both Genesis and Gemini were also sued by the Securities and Exchange Commission, which said they skirted disclosure requirements meant to protect Gemini Earn customers.
Last week, Genesis agreed to pay the SEC a $21 million fine, also conditional on its customers paying first. Meanwhile, Gemini has sued DCG over the failure of its crypto lending partnership.
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Source: vtt.edu.vn