In a New development, New York Attorney General Letitia James has <\/span>multiplied<\/span><\/a> the estimated size of the estimated penalty on the alleged lawsuit against Digital Currency Group (DCG).<\/span><\/p>\n According to a statement released from the office of the NYAG, the lawsuit against DCG has been expanded. Consequently, rather than the initial alleged $1 billion investor fraud, DCG has now been accused of participating in a criminal act worth $3 billion. This new insight came as a result of continued investigation into the matter.<\/span><\/p>\n <\/p>\n AG James confirmed that it was later discovered that more investors were defrauded and this summed up to the additional $2 billion.\u00a0<\/span><\/p>\n \u201cAfter months of false promises, we pulled the curtain back and revealed that DCG was lying to investors and defrauding them out of billions,\u201d Attorney General James said.<\/span><\/p>\n <\/p>\n Last year, the official <\/span>took legal action<\/span><\/a> against Gemini Trust Company (Gemini), Gene\u00adsis Global Capital, LLC and its affiliates (Genesis), and Digital Curre\u00adncy Group, Inc. for the roles they played in swindling 230,000 investors of $1 billion. Notably, the lawsuit was hinged on a crypto lending program called Gemini Earn.\u00a0<\/span><\/p>\n <\/p>\n These firms were accused of misleading investors by promising them unrealistic interest on their crypto investment in the Gemini Earn program. Once interested investors plunged in their funds, Genesis kickstarted a lending scheme with some risky borrowing conditions and the terms of their activities contradicted the low-risk image\u00ad that was earlier presented by Ge\u00admini.<\/span><\/p>\n Genesis and its parent firm DCG allegedly tried to conceal the extent of the losses incurred from the risky part that Genesis threaded. To further hide information on its losses, DCG and Gene\u00adsis planned a fraudulent promissory note\u00ad wherein DCG <\/span>agree\u00add to pay Genesis $1.1 billion<\/span><\/a> over te\u00adn years at an interest rate\u00ad of one percent. The agreement at the time stirred controversies with many, including crypto veteran Vijay Boyapati pointing out the flaw in the arrangement.<\/span><\/p>\n <\/p>\n Now that the lawsuit has been tripled, little wonder how long DCG will take to repay based on its former plan to repay $1.1 billion over ten years.<\/span><\/p>\n The new turn of events may negatively impact the market outlook of GBTC, seeing that its issuer, Grayscale Investments is a subsidiary of DCG. The spot Bitcoin ETF is <\/span>seeing huge outflows<\/span><\/a>, suggesting a return to its selloff weeks, a trend that might further be impacted as any lawsuit in DCG drags on.<\/span><\/p>\n <\/p>\n \u2713 Share:<\/p>\n <\/a><\/p>\n <\/a>\n <\/div>\n<\/p><\/div>\n<\/p><\/div>\n <\/p>\n Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture. Follow him on Twitter<\/a>, Linkedin<\/a> <\/p><\/div>\n<\/p><\/div>\nDCG Accused of False Promises<\/strong><\/h2>\n
Gemini Earn Program Gone Sour<\/strong><\/h2>\n
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