Digital Currency Group faces over $3 billion worth of fraud charges as New York AG expands lawsuit

Digital Currency Group’s (DCG) legal debacle has gone from bad to worse after the New York Attorney General’s office expanded its lawsuit.

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Digital Currency Group fraud case tripled

DCG is facing up to $3 billion worth of charges after New York Attorney General Letitia James tripled the fraud charges, according to a Reuters report.

The AG had sued DCG and its subsidiary, Genesis Global, alongside cryptocurrency firm Gemini Trust Co back in October of last year. The charges were based on allegations of “defrauding" investors of more than $1 billion.

It comes after cryptocurrency lending firm Genesis Global settled a lawsuit that the Attorney General had brought against it in 2023, which was a relief as it ended a colossal legal burden that weighed on the company as it navigated bankruptcy proceedings.

According to James, Genesis and parent company DCG leveraged an investment program called Gemini Earn to defraud investors. The Gemini Earn program was run by Genesis and former partner Gemini.

Per the allegation, the Earn program operated in such a way that Gemini customers would loan their crypto assets to Genesis and earn interest against the loan.

The Attorney General’s case against Genesis Global was, however, finalized in a Thursday settlement pending approval by the US Bankruptcy Court for the Southern District of New York. As part of the conditions for settlement, Genesis has agreed to halt all business dealings in the state of New York.

The Earn program case had also been picked up by the US Securities & Exchange Commission (SEC). However, this was settled last week with the accused conceding to a $21 million fine payable once all customers in its bankruptcy case are made whole.