New York AG Expands Crypto Fraud Lawsuit to Cover $3 Billion Investment Scam

Table of Contents

• Key Takeaways
• Expanded Allegations
• Strict Regulations Needed
• History of Crypto Enforcement
• The Fate of the Lawsuit

Key Takeaways

New York Attorney General Letitia James has expanded a lawsuit against cryptocurrency company Digital Currency Group, alleging a massive $3 billion fraudulent investment scam.

Expanded Allegations

The lawsuit, [filed in October 2023] Attorney General James Expands Lawsuit Against Cryptocurrency Company Digital Currency Group, initially claimed that DCG and its subsidiaries Gemini and Genesis had defrauded over 29,000 New Yorkers of over $1 billion. The AG’s office has now uncovered evidence that over 230,000 investors were allegedly defrauded of more than $3 billion total.

The updated lawsuit alleges that DCG and Genesis used a $1.1 billion promissory note to [conceal losses]SEC had previously accused and misled investors about the financial health of the Gemini Earn crypto lending program.

Strict Regulations Needed

Attorney General James emphasized that strict regulations are needed to protect crypto investors, saying “New Yorkers deserve transparency and fair dealings when investing their hard-earned money…Those who break the law must be held accountable.”

History of Crypto Enforcement

The New York AG’s office has a track record of taking action against crypto fraud, [recovering $24 million in 2023] Attorney General James Secures $4.3 Million from Cryptocurrency Company Defrauding Investors from crypto lender Nexo, as well as obtaining settlements and funds from other crypto firms.

The Fate of the Lawsuit

The intensified regulatory efforts aim to ensure proper conduct within the cryptocurrency industry and protect investors. The updated lawsuit now seeks over $3 billion in restitution for the allegedly defrauded investors.

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