New York Expands Fraud Case Against Digital Currency Group to $3 Billion

February 10, 2024 | by


The New York Attorney General, Letitia James, has expanded the fraud case against Digital Currency Group (DCG) to $3 billion in investor losses. This comes after an initial lawsuit accused DCG of cheating people out of $1 billion, but investors have since come forward with additional losses. The lawsuit alleges that DCG, along with Gemini and Genesis, misled investors by assuring them that their money was safe, despite knowing that the company was facing financial troubles. As many as 230,000 people are said to have lost money, prompting the expansion of the lawsuit. DCG has responded by denying the allegations and promising to fight the claims.

New York Expands Fraud Case Against Digital Currency Group to $3 Billion

Overview of the Fraud Case

The New York Attorney General, Letitia James, has expanded the fraud case against Digital Currency Group (DCG) to $3 billion in investor losses. The initial lawsuit accused DCG, along with its lending platform Genesis and Gemini Trust Co., of cheating investors out of $1 billion. However, following additional complaints from investors, the attorney general decided to amplify the case.

Initial Lawsuit and Investor Losses

The original lawsuit filed against DCG, Genesis, and Gemini in October alleged that the companies misled investors and assured them of the safety of their money, despite being aware of the impending financial doom. The focus of the fraud case was initially on the Gemini Earn investment program. However, after the lawsuit, numerous investors came forward claiming to have been swindled by Genesis directly.

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According to the attorney general, as many as 230,000 people may have lost up to $3 billion as a result of the alleged fraud. This prompted the expansion of the lawsuit in the New York Supreme Court.

Accusations against DCG and Gemini

The accusations against DCG and Gemini revolve around the companies’ misleading statements to investors. The lawsuit alleges that DCG and Gemini assured investors that their funds were safe, despite knowing otherwise. These misleading statements allegedly led investors to make decisions based on false information, ultimately resulting in significant financial losses.

Expansion of the Lawsuit

The expansion of the lawsuit comes as more investors have come forward with complaints of losses related to their investments with Genesis and Gemini. The attorney general received numerous reports of harm caused by the alleged fraudulent scheme, prompting the decision to increase the scope of the lawsuit.

By expanding the lawsuit, the attorney general aims to hold DCG and Gemini accountable for the larger scale of investor losses, totaling $3 billion. This sends a strong message about the importance of transparency and integrity in the cryptocurrency industry.

Number of Affected Investors and Amount Lost

As mentioned earlier, the attorney general estimates that approximately 230,000 investors have been affected by the alleged fraud. These investors collectively lost up to $3 billion as a result of their involvement with DCG, Genesis, and Gemini.

The significant number of affected investors highlights the impact that fraudulent practices can have on individuals and the need for stronger regulations in the cryptocurrency space to protect investors from such risks.

Call for Stronger Cryptocurrency Regulations

The expanded fraud case against DCG has renewed calls for stronger regulations in the cryptocurrency industry. Given the potential for large-scale losses and fraudulent activities, regulators and legislators are being urged to develop more robust frameworks to protect investors.

The New York Attorney General’s Office has emphasized the need for increased cryptocurrency regulations to prevent similar situations from arising in the future. These regulations would aim to ensure transparency, accountability, and investor protection throughout the cryptocurrency ecosystem.

DCG’s Response to the Lawsuit

DCG has responded to the expanded lawsuit by accusing the attorney general of seeking headlines rather than focusing on factual evidence. The company denies any wrongdoing and maintains that it has always conducted its business lawfully and with integrity.

DCG and its CEO, Barry Silbert, remain confident in their position and believe that they will ultimately be vindicated. They intend to vigorously defend against the claims made in the expanded lawsuit.

Conclusion and Updates

The expansion of the fraud case against DCG to $3 billion highlights the severity of the allegations and the potential impact on investors. The lawsuit has shed light on the need for stronger regulations in the cryptocurrency industry to protect investors from fraudulent activities.

As the case unfolds, further updates and developments will likely arise. It is crucial for investors and industry participants to stay informed and follow the proceedings closely to understand the implications for the cryptocurrency market.

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For more information and updates on the fraud case against DCG, readers can visit the CoinDesk website. Contact information can be found on the website for further inquiries or assistance.


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