The original $1.1 billion case, filed in October, has seen an increase in victim reports, accusing the firms of misrepresenting investment security, particularly in the Gemini Earn program. James alleges that Genesis took risky loans with ties to Sam Bankman-Fried's Alameda Research, information Gemini failed to reveal.

As additional investors, including a chiropractor and a stay-at-home dad who invested $2 million each, came forward, the scam seemed broader, implicating direct transfers to Genesis. The lawsuit also names former Genesis CEO Moro and DCG CEO Silbert.

Asserting the financial damage reaffirms the call for stricter crypto regulations, James argues. DCG denies the allegations and Genesis, now in bankruptcy proceedings since January 2023, reached a preliminary agreement to address the fraud claims, pending court approval.

Both companies are under SEC scrutiny for circumventing customer protection rules, with Genesis recently incurring a $21 million SEC penalty. Additionally, Gemini is suing DCG over their failed lending partnership.