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New York Attorney General Letitia James on Friday expanded her lawsuit against Digital Currency Group and other cryptocurrency defendants, tripling the size of their alleged fraud scheme to more than $3 billion.
James had in October sued DCG, its Genesis Global Capital unit, and Gemini Trust, the exchange run by twin brothers Cameron and Tyler Winklevoss.
She claimed they caused more than $1 billion of losses by misleading investors about the Gemini Earn program, which let customers lend crypto assets to Genesis in exchange for a high rate of return.
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The attorney general said it had become clear as more investors came forward that “the scam perpetrated by DCG through Genesis” also ensnared investors who sent money directly to Genesis and were falsely assured their money was safe.
Many of the additional investors were retail customers, including a chiropractor and a stay-at-home father who each invested $2 million of bitcoin with Genesis, the complaint said.
A visualization of the virtual cryptocurrency Bitcoin. (REUTERS/ Edgar Su)
James is seeking more than $3 billion of restitution for the more than 230,000 investors who she believes were defrauded.
“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,” James said in a statement.
DCG said Friday that James’ lawsuit was “baseless” and that it expects to win in court.
“DCG has always conducted its business lawfully and with integrity, and DCG and Barry Silbert will be fully vindicated,” it said in a statement.
Genesis is shutting down after filing for bankruptcy in January 2023.
Late Thursday, it reached a settlement with James’ office, agreeing to pay on her fraud claims so long as it fully repays customers through the Chapter 11 process. That settlement requires a bankruptcy judge’s approval.
Representatives for DCG and Gemini did not immediately respond to requests for comment.
Barry Silbert, who is DCG’s chief executive, and Soichiro Moro, a former Genesis chief executive, are also defendants.
Genesis filed for bankruptcy two months after halting withdrawals by Gemini Earn customers following the collapse of Sam Bankman-Fried’s FTX cryptocurrency exchange.
Both Genesis and Gemini were also sued by the U.S. Securities and Exchange Commission, which said they bypassed disclosure requirements meant to protect Gemini Earn customers.
Last week, Genesis agreed to pay the SEC a $21 million fine, also contingent on its repaying customers first.
Gemini, meanwhile, has sued DCG over their failure of their crypto lending partnership.
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A Boston nightclub where a woman collapsed on the dance floor and died last month will have its entertainment license reinstated after the Boston Licensing Board found no violations Thursday.
Anastaiya Colon, 27, was at ICON, a nightclub in Boston’s Theater District, in the early hours of Dec. 21 when she suffered a fatal medical episode. Following the incident, her loved ones insisted that the club’s staff did not respond professionally and failed to control crowds.
City regulators suspended ICON’s entertainment license pending an assessment of any potential violations. During a hearing Tuesday, they heard from attorneys representing the club and people who were with Colon the night she died.
As EMTs attempted to respond, crowds inside the club failed to comply with demands to give them space, prompting police to shut down the club, according to a police report of the incident. However, the club and its representatives were adamant that staff handled their response and crowd control efforts properly.
Kevin Montgomery, the club’s head of security, testified that the crowd did not impede police or EMTs and that he waited to evacuate the club because doing so would have created a bottleneck at the entrance. Additionally, a bouncer and a bartender both testified that they interacted with Colon, who ordered one drink before collapsing, and did not see any signs of intoxication.
Angelica Morales, Colon’s sister, submitted a video taken on her phone to the board for them to review. Morales testified Tuesday that the video disproves some of the board’s claims and shows that ICON did not immediately respond to the emergency.
“I ran to the DJ booth, literally bombarded everybody that was in my way to get to the DJ booth, told them to cut the music off,” Morales said. “On my way back, the music was cut off for a minute or two, maybe less, and they cut the music back on.”
Shanice Monteiro, a friend who was with Colon and Morales, said she went outside to flag down police officers. She testified that their response, along with the crowd’s, was inadequate.
“I struggled to get outside,” Monteiro said. “Once I got outside, everybody was still partying, there was no type of urgency. Nobody stopped.”
These factors, along with video evidence provided by ICON, did not substantiate any violations on the club’s part, prompting the licensing board to reinstate their entertainment license at a subsequent hearing Thursday.
“Based on the evidence presented at the hearing from the licensed premise and the spoken testimony and video evidence shared with us from Ms. Colon’s family, I’m not able to find a violation in this case,” Kathleen Joyce, the board’s chairwoman, said at the hearing.
However, Joyce further stated that she “was not able to resolve certain questions” about exactly when or why the club turned off the music or turned on the lights. As a result, the board will require ICON to submit an emergency management plan to prevent future incidents and put organized safety measures in place.
“This plan should outline detailed operational procedures in the event of a medical or any other emergency, including protocols for police and ambulance notification, crowd control and dispersal, and procedures regarding lighting and music during an emergency response,” Joyce said.
Though the club will reopen without facing any violations, Joyce noted that there were “lessons left to be learned” from the incident.
“This tragedy has shaken the public confidence in nightlife in this area, and restoring that confidence is a shared obligation,” she said. “People should feel safe going out at night. They should feel safe going to a club in this area, and they should feel safe getting home.”
Keeana Saxon, one of three commissioners on the licensing board, further emphasized the distinction Joyce made between entertainment-related matters and those that pertained to licensing. Essentially, the deciding factor in the board’s decision was the separation of the club’s response from any accountability they may have had by serving Colon liquor.
“I hope that the family does understand that there are separate procedures for both the entertainment and the licensing, just to make sure that on the licensing side, that we understand that she was only served one drink and that it was absolutely unforeseeable for that one drink to then lead to some kind of emergency such as this one,” Saxon said.
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Jack McGregor, a former state senator and the original founder of the Pittsburgh Penguins, died at the age of 91 on Tuesday. The organization announced the news in a post on social media on Thursday.
“The team extends our deepest condolences to his family, friends, and teammates during this difficult time,” a post on X said.
No other information was provided in the post, which was shared before the team’s game at PPG Paints Arena against the New Jersey Devils.
According to his biography on the United States Senate Library, McGregor served in the state Senate from 1963-1970. He represented District 44 in Allegheny County and was a Republican.
He was born in Kittanning, Armstrong County, and attended the University of Pittsburgh and Quinnipiac University before getting into politics, according to his biography. He also served in the United States Marine Corps.
In 1966, the NHL granted a franchise to Pittsburgh after McGregor formed a group of investors that included H. J. Heinz II and Art Rooney. McGregor was named president and chief executive officer by the investors and represented Pittsburgh on the NHL’s Board of Governors, according to his biography.
The team played its first game in 1967 at the Civic Arena. McGregor owned the team for four years before selling it.
There is also a scholarship in his name at Pitt. It aims to provide “financial assistance to a law student who excels academically and has committed to working in the public sector,” the university says.
BURLINGTON, Conn. (WFSB) – Connecticut State Police are investigating a suspicious incident at a residence on Case Road in Burlington.
Multiple state troopers and police vehicles were seen at the home conducting an investigation. A viewer reported seeing nine police cars and numerous troopers at the scene.
State police said there is no threat to the public at this time. The investigation is ongoing.
No additional details about the nature of the suspicious incident have been released.
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