Over the past two months, the FTX crash has deeply affected the cryptocurrency market. In particular, regulators have started to take steps towards crypto money platforms, state officials have focused on some platforms. The latest company to be subject to such a development was the Digital Currency Group (DCG). Here are the details…
Cryptocurrency company DCG is on regulators’ radar
US prosecutors and the Securities and Exchange Commission (SEC) have begun investigating the cryptocurrency-focused conglomerate Digital Currency Group (DCG), Bloomberg reports, citing anonymous sources. New York federal prosecutors are investigating transfers between DCG and its subsidiary, Genesis. He also began to demand the records and documents of the negotiations for these two companies. According to the report, the SEC is also launching an investigation into the holding.
These agencies have not yet officially announced their investigations. Also, according to Bloomberg, the US Department of Justice (DoJ) launched its investigation in November, when FTX collapsed. Investigations are still in their infancy and officials have not brought any charges against the company or its executives.
DCG affiliates suffer
Meanwhile, cryptocoin.com As we previously reported, DCG reportedly closed its asset management organization HQ. Also, according to the latest developments, DCG’s wholly-owned Genesis Global Trading announced a 30 percent staff reduction. DCG, which also owns crypto-asset manager Grayscale and mining firm Foundry, has also come under the spotlight due to debt issues from Three Arrows Capital in 2022.
But much of the turmoil began with the FTX crash in November. Shortly after FTX went bankrupt, Genesis paused withdrawals from its lending platform, citing “unprecedented market conditions.” Previously, documents pertaining to the July liquidation of Three Arrows Capital revealed that 3AC received a $2.36 billion loan from Genesis Global Trading, Genesis’ brokerage unit.
DCG borrowed from Genesis
In November, it was revealed that DCG also borrowed money from Genesis. DCG currently has a $575 million loan due to Genesis in May. Recently, Genesis has also been at odds with cryptocurrency exchange Gemini. Genesis owes $900 million to Gemini Earn, a lending product unique to Gemini, the exchange of the Winklevoss twins. Derar Islim, Genesis’ interim CEO, said that Genesis is “focused on finding a solution for our borrowing and lending brokerage business.”
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