New York Attorney General Letitia James today filed an amended complaint, expanding the Office of the Attorney General’s (OAG) lawsuit against Digital Currency Group, Inc. (DCG), DCG CEO Barry Silbert, and Genesis Global Capital, LLC and its affiliates (Genesis) former CEO Soichiro Moro for defrauding additional individuals and institutions of an additional $2 billion.
This amended complaint is the result of more investors coming forward after Attorney General James filed suit in October 2023 against Gemini Trust Company, Genesis and DCG for making misleading statements to investors about an investment program called Gemini Earn that caused losses of more than 1 billion dollars.
The OAG’s ongoing investigation revealed that these additional investors were similarly defrauded and provided false assurances that their funds were safe when in fact they were not, leading to an additional $2 billion in lost assets. In total, the OAG found that these companies defrauded more than 230,000 investors out of more than $3 billion.
In October 2023, Attorney General James filed a sweeping lawsuit against cryptocurrency companies Gemini, Genesis, and DCG for defrauding investors of more than $1 billion. That lawsuit was the result of an OAG investigation that found Gemini lied to investors about an investment program it ran with Genesis called Gemini Earn. Gemini repeatedly assured investors that investing with Genesis through the Gemini Earn program was a low-risk investment.
However, the OAG investigation revealed that Gemini’s internal analyzes of Genesis showed that the company’s financials were at risk. In addition, the OAG found that after losing more than $1.1 billion in loan defaults, Genesis, DCG and their executives tried to hide their losses by entering into a $1.1 billion promissory note, in which DCG agreed to pay the Genesis $1.1 billion in a decade only one percent interest. The suit alleges that DCG, through Genesis, used the note as part of a scheme to deceive investors and the public about Genesis’ financial condition and ability to operate its business.
Since that lawsuit was filed, additional investors have come forward to share their experiences and losses due to the fraud perpetrated by DCG through Genesis. While the initial lawsuit focused largely on the losses of retail investors participating in the Gemini Earn investment program, as more complaints were made, it became clear that the sophisticated nature of the fraud also defrauded other investors who contributed their money directly to the DCG Genesis subsidiary. .
As a result of these complaints, the OAG filed its amended complaint and is now seeking more than $3 billion in damages for defrauded investors.