SNEAK PEEK
- Sec and DOJ look into transactions between DCG and the groups subsidiary
- DOJ reportedly request interviews and documents from DCG and Origin
- Genesis Trading experiences a substantial loss as a result of Three Arrows Capital’s failure
Friday night, Bloomberg reported that investigators from the US Securities and Exchange Commission and the US Department of Justice’s Eastern District of New York (EDNY) are looking into transactions between Digital Currency Group and the group’s Genesis subsidiary.
The SEC’s investigation seems to be in its infancy, while the DOJ’s Eastern District of New York Office has reportedly requested interviews and documents from DCG and Origin. Neither Genesis nor DCG, which happens to be CoinDesk’s parent company, have been accused of misbehavior thus far, according to the story’s sources.
Based on the source, the probes seem to be particularly centered on the financial interactions between Genesis and DCG.
In late June, CoinDesk reported that Genesis Trading was suffering significant losses as a result of loans given to the now-defunct hedge firm Three Arrows Capital, which had lodged a $1.2 billion claim. DCG acknowledged the origin assertion.
Moreover, companies like Gemini, which depended on Genesis for its Earn platform, were impacted when Genesis announced in November that its lending arm would cease withdrawals. Subsequently, Cameron Winklevoss, co-founder of Gemini, and Barry Silbert, co-founder of DCG, have engaged in a public battle over the circumstances behind this suspension.
Over the previous several months, Genesis has replaced its top leadership and reduced its personnel by roughly half since August. After then, the FTX crypto empire exploded, doing even more harm to the Book of Genesis.
Further, Origin has enlisted the help of experts to consider its alternatives, which may include a future Chapter 11 bankruptcy case.
As of early December, CoinDesk reported that Genesis’ creditors had demanded over $1.8 billion.