Bloomberg: DCG Group and Genesis Internal Accounts Investigated by SEC, closely monitoring losses in 2022

According to a report by Bloomberg, sources revealed that the Eastern District of New York Federal Court (EDNY) and the U.S. Securities and Exchange Commission (SEC) are investigating internal transfers within the DCG Group. Genesis, a lending platform under the DCG Group, has suffered significant losses due to the bankruptcies of Three Arrows Capital and FTX, leading to a 30% workforce reduction and the possibility of bankruptcy restructuring.

Regulatory Investigation into Internal Accounts, DCG: Always Compliant

Sources indicate that prosecutors from the Eastern District of New York (EDNY) and the SEC are investigating CEO Barry Silbert, DCG Group, and its subsidiaries, closely monitoring the losses in 2022.

A spokesperson for DCG responded that the group's operations have always been compliant and they are not aware of any investigation. Genesis stated that they would cooperate with any regulatory requests for an investigation.

DCG and Genesis Accounts Under Scrutiny

Genesis, a lending platform under the DCG Group, suffered significant losses during the bankruptcy of Three Arrows Capital. Rumors suggest that DCG issued a ten-year note, assuming up to $2.1 billion in bad debt from Genesis, and if Genesis goes bankrupt, DCG would be forced to cash out the debt in cash.

In addition, the exchange Gemini, which offers yield products in cooperation with Genesis, temporarily suspended redemptions due to Genesis' situation. The founder of Gemini recently issued a public letter stating that DCG owes Genesis $1.6 billion in debt, causing malicious delays and burdening Gemini users. DCG CEO Barry Silbert denied any issues with outstanding debts.

Although the figures in the two accounts do not match, they both point to the lending relationship established between DCG and Genesis through the promissory note.

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