(Bloomberg) -- The alleged fraud involving Gemini Trust Co. and Barry Silbert’s Digital Currency Group was three times bigger than initially thought, the New York attorney general said in a revised lawsuit that now seeks $3 billion in restitution for more than 230,000 investors.

The civil complaint was initially filed in October seeking $1.1 billion. But it’s been amended after additional DCG investors came forward to claim they’d been misled about the safety of their investments, New York Attorney General Letitia James said Friday in a statement. The amended suit doesn’t include new allegations against Gemini.

The suit accuses Gemini, which operated a crypto exchange, and DCG’s Genesis Global Capital unit of failing to disclose to investors the risks of a crypto-lending program they started in 2021. The venture’s assets collapsed last year amid several high-flying bankruptcies, including Sam Bankman-Fried’s FTX.

“The fraud and deceit were so expansive that many additional people have come forward to report similar harm,” James said Friday. “This illegal cryptocurrency scheme, and the horrific financial losses that real people have suffered, are yet another reminder of why stronger cryptocurrency regulations are needed to protect all investors.”

On Thursday, Genesis Global Holdco LLC settled with the state, which alleged the bankrupt crypto lender defrauded customers of its now-terminated Gemini Earn program, which was run jointly with Gemini Trust Co. The settlement still needs bankruptcy court approval.

‘Baseless Complaint’

“There is nothing new here,” DCG said in an emailed statement. “This is the same baseless complaint recirculated to generate another round of press headlines. We will fight the claims aggressively and we will win. DCG has always conducted its business lawfully and with integrity, and DCG and Barry Silbert will be fully vindicated.”

Silbert and Gemini didn’t immediately return requests for comment. Michael Moro, the former chief executive officer of Genesis, also didn’t immediately respond to a request for comment.

Gemini, founded by brothers Tyler Winklevoss and Cameron Winklevoss, misled customers about how risky loans were in its venture with Genesis, the state claims. Gemini failed to disclose that at one point, almost 60% of its third-party loans were to Bankman-Fried’s crypto trading firm Alameda Research, according to the suit, which accused Genesis and DCG of trying to conceal spiraling losses.

Gemini Earn purported to generate as much as 8% interest for Gemini customers by allowing Genesis to lend their cryptoassets to third parties. But more than $1 billion was invested in Three Arrows Capital, a hedge fund that failed in mid-2022, leaving a hole in Genesis’s balance sheet, New York said in its suit. Around the same time, Genesis lost more than $100 million from another borrower, Babel Finance, according to the state.

Gemini previously applauded the complaint against Genesis and DCG, but said it disagree with the being added the complaint in October, saying it was “blaming a victim for being defrauded and lied to.” 

(Updates with statement from DCG. An earlier version was corrected to show Moro was the former CEO of Genesis.)

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