Attorney General Letitia James expands lawsuit against Digital Currency Group, alleging misleading investor practices.
The State of New York, led by Attorney General Letitia James, has intensified its legal battle against the Digital Currency Group (DCG) and its affiliates, including the cryptocurrency exchange Gemini. The lawsuit, which originally sought over $1 billion in restitution for investors, has now been expanded to allege that the companies are responsible for a staggering $3 billion in investor losses.
The core of the allegations revolves around the Gemini Earn product and direct investments with Genesis, a lending platform within the DCG umbrella. The Attorney General's office claims that these entities misled investors about the safety of their funds, leading to significant financial damage. The expansion of the lawsuit incorporates additional claims from investors who assert they were defrauded by Genesis.
In response to the expanded lawsuit, DCG has firmly denied any wrongdoing. The company has expressed its intention to contest the allegations vigorously and expects to be fully vindicated in the legal process. This strong stance indicates a protracted legal battle ahead as both sides prepare to present their cases.
Adding to the complexity of the situation, Gemini had previously sued DCG in July, accusing them of accounting fraud. Meanwhile, Genesis, which is also embroiled in the lawsuit, has reached a settlement with the state of New York after filing a bankruptcy restructuring plan. This development could influence the ongoing legal proceedings and the strategies of the involved parties.
The Securities and Exchange Commission (SEC) has also taken action against Gemini and Genesis. In January, the SEC sued both entities for the sale of unregistered securities, adding a layer of regulatory scrutiny to the mix. This federal involvement underscores the seriousness of the allegations and the potential consequences for the cryptocurrency industry.
