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<p class="is-style-lead">New York Attorney General Letitia James has revised a lawsuit against Digital Currency Group (DCG) and its affiliate Gemini Trust Co., escalating the demand for restitution to $3 billion.&nbsp;</p>
<p>This extended lawsuit was filed just hours after Genesis Global had reached a <a href="https://crypto.news/bankrupt-lender-genesis-global-strikes-settlement-over-ny-fraud-claims/" rel="noopener noreferrer nofollow">settlement</a> with New York on accusations of defrauding customers through the terminated Gemini Earn program. According to the latest <a href="https://ag.ny.gov/sites/default/files/2024-02/genesis-amended-complaint.pdf" target="_blank" rel="noopener noreferrer nofollow">court filing</a>, this adjustment reflects claims from over 230,000 investors, indicating the scale of the alleged fraud is significantly larger than previously believed.&nbsp;</p>
<p>Initially, the lawsuit sought $1.1 billion in October, but the figure was increased following new investor testimonies regarding misleading assurances about investment safety.</p>
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   <p lang="en" dir="ltr">After we filed our lawsuit against <a href="https://twitter.com/DCGco?ref_src=twsrc%5Etfw" target="_blank" rel="noopener noreferrer nofollow">@DCGco</a> and <a href="https://twitter.com/GenesisTrading?ref_src=twsrc%5Etfw" target="_blank" rel="noopener noreferrer nofollow">@GenesisTrading</a> over their crypto fraud, more victims came forward to report significant losses.<br><br>Today, we expanded our lawsuit against these crypto companies for defrauding hundreds of thousands of people out of over $3 billion. <a href="https://t.co/019TM4hmnj" target="_blank" rel="noopener noreferrer nofollow">https://t.co/019TM4hmnj</a></p>— NY AG James (@NewYorkStateAG) <a href="https://twitter.com/NewYorkStateAG/status/1756021889904877602?ref_src=twsrc%5Etfw" target="_blank" rel="noopener noreferrer nofollow">February 9, 2024</a>
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<p>The legal action does not introduce fresh allegations against Gemini but focuses on the purported failure of Gemini and Genesis Global Capital, a DCG unit, to inform investors about the dangers associated with a crypto lending program launched in 2021. The program’s downfall coincided with major bankruptcies within the crypto industry, including the collapse of FTX, led by <a href="https://crypto.news/ftx-saga-what-happened-to-ftx/" rel="noopener noreferrer nofollow">Sam Bankman-Fried</a>.</p>
<p>You might also like: <a href="https://crypto.news/coindesk-ceo-fired-in-latest-restructuring-move/" rel="noopener noreferrer nofollow"> CoinDesk CEO fired in latest restructuring move </a></p>
<h2 class="wp-block-heading" id="what-is-the-lawsuit-against-gemini-and-genesis">What is the lawsuit against Gemini and Genesis?</h2>
<p>The Gemini Earn program was a collaboration between Gemini and Genesis. It allegedly offered customers up to 8% interest in lending out their crypto assets.</p>
<p>However, the state’s lawsuit claims significant investments were made in unsafe ventures, notably <a href="https://crypto.news/singapore-issues-order-against-three-arrows-capital-founders/" rel="noopener noreferrer nofollow">Three Arrows Capital</a>, which went bankrupt, and Babel Finance, where over $100 million was lost, deeply impacting Genesis’s financial stability.</p>
<p>The <a href="https://ag.ny.gov/press-release/2024/attorney-general-james-expands-lawsuit-against-cryptocurrency-company-digital" target="_blank" rel="noopener noreferrer nofollow">lawsuit</a> also alleges that Gemini, founded by the famous Winklevoss twins, did not fully disclose the risks associated with their loans. Particularly, they did not highlight that a substantial portion of the third-party loans were made to Alameda Research, owned by Sam Bankman-Fried.</p>
<p>This led to a broader accusation that Genesis and DCG sought to hide the extent of their financial troubles from investors.</p>
<p>Read more: <a href="https://crypto.news/uk-ex-chancellor-hammonds-crypto-startup-ties-under-scrutiny/" rel="noopener noreferrer nofollow"> UK ex-Chancellor Hammond’s crypto startup ties under scrutiny </a></p>

New York extends lawsuit against DCG to $3b after Genesis settlement

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