The authorities are looking into internal transactions between DCG and its affiliate cryptocurrency lending company Genesis Global Capital, according to Cointelegraph.
The Securities and Exchange Commission (SEC) and the Eastern District of New York of the United States Department of Justice are both looking into the crypto conglomerate Digital Currency Group (DCG), according to Cointelegraph, which cited Bloomberg.
The authorities are looking into internal transactions between DCG and its affiliated cryptocurrency loan company Genesis Global Capital, according to Cointelegraph. While the SEC is conducting an early-stage investigation, it is understood that prosecutors have made attempts to get interviews and information from both firms.
“DCG has a strong commitment to honesty and has always operated legally. We are unaware of any Eastern District of New York inquiry into DCG and have no reason to suspect there is one, according to a DCG representative.
According to information provided by Cointelegraph, Genesis would be affected if FTX collapsed in November 2022. The company disclosed that it has $175 million locked up in an FTX trading account on November 10, 2022. On November 16, 2022, it’s thought that Genesis halted withdrawals due to liquidity issues and contracted with investment bank Moelis & Company for restructuring reasons.
Additionally, Cointelegraph pointed out that Genesis owes cryptocurrency exchange Gemini $900 million. According to reports, the two companies collaborated on a product called Gemini Earn that enables cryptocurrency investors to earn 8% interest on their crypto loans. According to sources, Gemini made the claim regarding DCG’s refusal to pay Genesis, which prevented payments from being issued to Genesis clients.
