The United States Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) have opened investigations into Barry Silbert’yes digital currency group (DCG) to examine its internal money transfers and loans, as reported by Bloomberg News.
Prosecutors are investigating the transfers between DCG, a subsidiary of the troubled company, which asked not to be named because the investigation has not yet been made public. The investigation also includes DCG investors and aims to find out if they were informed about these internal transfers and loans.
A DCG spokesperson commented on the matter at Silbert’s request, telling Bloomberg:
“DCG has a strong culture of integrity and has always conducted its business legally. We have no knowledge of or reason to believe that there is any investigation by the Eastern District of New York into DCG.”
At the moment, neither DCG nor Silbert are charged with any wrongdoing. However, the investigation is active and prosecutors have requested interviews and documents. The SEC and DOJ have declined to comment on the matter.
Genesis
crypto lender Genesis it also became involved in the investigations as one of the subsidiaries of the DCG. The company said it did not comment on specific legal issues, adding:
“Genesis maintains a regular dialogue and cooperates with relevant regulators and authorities when it receives inquiries,”
DCG was hit hard by Genesis’s financial woes. In addition, Genesis was hit hard by the collapse of Three Arrows Capital (3AC), one of the companies that filed for bankruptcy after the Terra-Luna accident.
FTX’s collapse a few months later did not help Genesis’s healing process. Shortly after the FTX collapse, on November 16, Genesis stopped customer withdrawals. Then, on January 5, the lender fired 30% of his staff and said he could file for Chapter 11 bankruptcy by saying he’s trying to cut costs and increase efficiency.
The Genesis issues were connected to the crypto exchange. Gemini. Founders of Gemini, the Winklevoss twins, reclaimed that Silbert owed Genesis $1.675 billion, and a portion of this department belonged to users of the Gemini’s Earn program.
Although Silbert responded to the twins and said that the DCG had no outstanding debt to Genesis, the twins refused to agree, asking Silbert to stop pretending that he and the DCG were “innocent bystanders and had nothing to do with the creation”. This mess.”
