Last Updated on January 8, 2023 by Bitfinsider
U.S. officials are actively looking into Digital Currency Group, often known as DCG. Prosecutors are investigating the internal transactions between the multibillion-dollar crypto corporation and its crypto lending arm, Genesis Global Capital, in New York, notably the city of Brooklyn.
According to unnamed sources familiar with the inquiry, federal prosecutors are already interviewing certain employees and requesting office records.
A DCG official responded to the situation and denied that the American venture capital firm was under investigation. He said: “DCG has a strong culture of integrity and has always conducted its business lawfully. We have no knowledge of or reason to believe that there is any Eastern District of New York investigation into DCG.”
However, the Securities and Exchange Commission (SEC) is also looking into the company, and DCG may be in a two-way conflict. However, no one has yet filed an indictment against DCG, and neither of the US agencies have provided any concrete information.
Genesis Global Capital’s issues began in the middle of last year after the demise of renowned hedge fund Three Arrows Capital. The crypto lending services suffered significant losses of $1.2 billion during this time.
A few months later, when the multibillion dollar cryptocurrency exchange FTX declared bankruptcy, Genesis also took a hit. Genesis experienced a liquidity difficulty as a result of the demise of FTX, and as a result, withdrawal and loan requests have been put on hold.
To allay public worries, DCG has consistently refrained from endorsing Genesis’s repeated claims that the company operated independently.
DCG’s CEO and founder, Barry Silbert, disclosed all existing debts between the two firms in a circular to its shareholders in November 2022. He added that all loans were provided on a “arm’s length basis” and that the repayment schedule was designed to take into account the current market interest rates.
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