Report: Federal Prosecutors in New York Probe Digital Currency Group and Subsidiary Genesis

Following accusations from Gemini co-founder Cameron Winklevoss in an open letter to Digital Currency Group CEO Barry Silbert, a report citing “people familiar with the matter” states that federal prosecutors from New York are scrutinizing transfers between Digital Currency Group and its subsidiary, Genesis Global Capital.

Report Claims Digital Currency Group, Genesis Global Capital Allegedly Face Scrutiny from Federal Prosecutors in New York

According to a recent letter from Cameron Winklevoss, co-founder of the crypto alternate Gemini, Digital Currency Group (DCG) has till Jan. 8, 2023, to resolve liquidity points between Gemini and the lending unit of Genesis Global Capital. It has been reported that Genesis owes $900 million to Gemini Earn clients and each firms’ lending arms have halted withdrawals since mid-Nov. 2022.

Reports have disclosed that Genesis was impacted severely by the collapse of FTX and Alameda Research and Gemini has lately been informed that it might face a possible class-action lawsuit over the matter. Bloomberg states that federal investigators are getting concerned and are reportedly wanting into transactions between Digital Currency Group (DCG) and Genesis. “People familiar with the matter,” who requested anonymity, told the publication that prosecutors within the Eastern District of New York and the U.S. Securities and Exchange Commission (SEC) are investigating the difficulty.

Bloomberg requested a remark from Silbert and a Digital Currency Group (DCG) spokesperson responded. “DCG has a strong culture of integrity and has always conducted its business lawfully. We have no knowledge of or reason to believe that there is any Eastern District of New York investigation into DCG,” the corporate spokesperson mentioned in a press release. The information outlet additionally reported that “the SEC and US Attorney’s Office for the Eastern District of New York declined to comment.”

The Bloomberg editorial follows a collection of stories about alleged probes by U.S. authorities into crypto corporations which have both resulted in enforcement, by no means materialized, or have but to come back to fruition. In the previous 12 months, stories citing “people familiar with the matter” have acknowledged that U.S. investigators are probing crypto reserve auditors, U.S. taxpayers, Three Arrows Capital, Twitter, Coinbase, Binance, and Uniswap, amongst others.

What do you consider the report that alleges Digital Currency Group (DCG) and Genesis are being investigated by U.S. authorities? Share your ideas on this subject within the feedback part under.