Digital Currency Group Faces $3 Billion Restitution Demand in NYAG’s Expanded Lawsuit

DCG Accused of Defrauding Investors

New York Attorney General Letitia James has filed an amended lawsuit against Digital Currency Group (DCG), CEO Barry Silbert, and Genesis Global Capital, alleging an additional $2 billion in fraud, bringing the total alleged fraud to over $3 billion. The lawsuit stems from an initial suit filed in October 2023, where Gemini, Genesis, and DCG were accused of misleading investors about the Gemini Earn investment program, resulting in over $1 billion in losses.

Investigation Reveals More Defrauded Investors

Following continued investigations, the New York Attorney General’s office alleged that more investors had been defrauded, leading to the expanded lawsuit. According to Attorney General James, the investigation revealed that these additional investors were provided with “false assurances” of the safety of their funds, resulting in substantial losses. The total number of defrauded investors is estimated to exceed 230,000.

Attorney General Calls for Stronger Cryptocurrency Regulations

Attorney General James emphasized the need for stronger cryptocurrency regulations to protect all investors, stating: “After months of false promises, we pulled the curtain back and revealed that DCG was lying to investors and defrauding them out of billions. The fraud and deceit were so expansive that many additional people have come forward to report similar harm. 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.”

NYAG’s Crackdown on Cryptocurrency Scams

Attorney General James has taken several actions in recent years to rein in the cryptocurrency industry and allegedly safeguard investors. These actions include recovering funds from non-compliant platforms such as CoinEx and Coin Cafe, recovering millions from Nexo’s cryptocurrency platform, and securing court judgments against Coinseed and GTV Media for their alleged fraudulent practices.

DCG Faces $3 Billion Restitution Demand

The amended complaint against DCG and Genesis represents another significant step in the Attorney General’s crackdown on embattled crypto companies that prosecutors allege have defrauded investors. Specifically, the lawsuit seeks more than $3 billion in restitution from DCG. The outcome of the case will have implications for the parties involved and the broader cryptocurrency industry.