New York's attorney general has upgraded its lawsuit against cryptocurrency behemoth Digital Currency Group, now seeking $3 billion in restitution from defrauded investors instead of $1 billion.
In October, the New York attorney general's office sued Genesis Global Capital, Gemini Trust and DCGG crypto companies for “lying to investors and attempting to conceal losses of more than $1 billion.”
At the time, the lawsuit said that he wanted to return 1 billion dollars. But today's updated indictment alleges that several investors have been arrested and are seeking $2 billion in additional funds as a result.
Attorney General Leticia James said in the amended complaint that “the fraud and deception is so widespread that many more people have come forward to do the same harm.”
For its part, DCG told Decrypt that the amended complaint is meaningless.
A DCG spokesperson said: “There is nothing new here – this is the same baseless complaint that has been re-circulated to create another round of press headlines.” “We will vigorously fight and win claims. DCG has always conducted its business legally and with integrity, and DCG and Barry Silbert are fully vindicated.”
“This illegal cryptocurrency scheme and the horrific financial losses real people have faced is another reminder of why strong cryptocurrency regulations are needed to protect all investors,” she added.
In a statement, James' office said the companies defrauded more than 230,000 investors out of more than $3 billion.
DCG is a large collection of digital assets. Genesis is one of the many companies managed by him, which allows users to earn money on their crypto holdings.
Genesis went bankrupt last year but was funding its cryptocurrency exchange Gemini for its revenue program.
Investors used the Earn program to earn money on their crypto.
The lawsuit originally alleged that Gemini lied to investors to get them to invest through Genesis. But the amended indictment clearly states that the “sophisticated nature of the fraud defrauded other investors who contributed their money directly to DCG Affiliate Genesis.”
This article has been updated to include comments from DCG. Edited by Ryan Ozawa.
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