NY attorney general triples her accusations against Gemini, DCG, seeks $3B

James’ office initially sued Gemini, DCG, CEO Barry Silbert and subsidiary Genesis in October

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New York Attorney General Letitia James | lev radin/Shutterstock modified by Blockworks

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New York Attorney General Letitia James is now seeking $3 billion – triple the amount initially suggested – in restitution from Gemini Trust and Digital Currency Group for alleged fraud involving the companies’ Gemini Earn product. 

James’ office initially sued Gemini, DCG and related parties, including DCG CEO Barry Silbert and subsidiary Genesis, in October, alleging investors had been swindled out of $1.1 billion. The figure has now increased to $3 billion, according to an amended complaint filed Friday, to reflect losses from additional investors that have come forward, James’ office said. 

According to the complaint, Gemini falsely advertised Earn as “a highly liquid investment” and misled investors to believe that “Genesis Capital was creditworthy based on Gemini’s ongoing risk monitoring.”

The total number of impacted investors is now 230,000, James said in a statement Friday. 

“The fraud and deceit were so expansive that many additional people have come forward to report similar harm,” James added. “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.”

The amended lawsuit comes as Genesis continues what have become contentious bankruptcy proceedings. Genesis on Wednesday won a court ruling against Gemini confirming its ownership of Grayscale Bitcoin Trust shares worth roughly $1.2 billion. Gemini had sued Genesis in October over rights to the shares. 

Read more: DCG objects to Genesis bankruptcy plan, claims it ‘favors’ some creditors

A month after the New York attorney general’s office sued both companies, Genesis sued Gemini in an effort to recover over half a billion dollars. Genesis claims Gemini received more than $689 million in withdrawals in the three months before the crypto lender filed for Chapter 11 bankruptcy. Gemini has until Feb. 21 to respond to the complaint.  

“As a result of these withdrawals, [Gemini] benefitted at the expense of [Genesis’s] other creditors, and continues to benefit to this day through their retention of the property [Genesis] seeks to avoid and recover here,” the complaint, filed in November, reads. 

In the New York attorney general’s lawsuit, parties are due to appear for a preliminary conference on March 4.As their own legal battles heat up, NY Attorney General Letitia James amends her lawsuit against DCG and Gemini


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