New Investigation Focuses On Digital Currency Group and Genesis Global Capital
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Digital Currency Group (DCG) and its subsidiary, Genesis Global Capital, have recently found themselves under the watchful eyes of New York’s legal authorities.
The Investigation into Digital Currency Group Begins
As reported by Bloomberg, New York Attorney General Letitia James has initiated an inquiry into the financial transactions between DCG and Genesis Global Capital. While no formal complaints have been issued yet, investigators from the U.S. SEC and federal prosecutors have joined the fray, seeking to interview individuals linked with both entities.
The scrutiny centers around the loans and financial transactions between Digital Currency Group and Genesis. Reports reveal that DCG accepted a substantial loan of approximately $575 million from Genesis last year.
A separate matter of concern is the involvement of DCG’s CEO, Barry Silbert. Silbert had made a notable declaration of a $1.1 billion promissory note in a letter to DCG’s shareholders. He claimed that the note originated from DCG’s assumption of Genesis’s liabilities, which were tied to the failure of the renowned hedge fund, Three Arrows Capital (3AC).
The Promissory Note Saga
The promissory note’s disclosure to investors is now a significant focus of the investigation. This note’s “presentation” to investors is under intense examination. Legal representation for Digital Currency Group Seth DuCharme has assumed the responsibility to navigate the company through these choppy legal waters.
While under the spotlight, Digital Currency Group remains compliant and cooperative with the regulatory bodies and investigative agencies involved. A spokesperson for the company stressed that the transactions in question were conducted according to standard market procedures.
They maintained that the deals were “always structured on an arm’s length basis and priced at prevailing market interest rates.”
Genesis Global Capital’s Financial Struggles
Genesis Global Capital declared Chapter 11 bankruptcy earlier this year following liquidity issues and the collapse of significant cryptocurrency firms, including 3AC and crypto exchange FTX. The company’s financial liabilities, estimated between $1 billion to $10 billion, matched its assets, leaving them in a precarious state.
Furthermore, Genesis’s financial entanglement with FTX, where they are the largest unsecured creditor with a hefty $226 million due, adds another layer of complexity to this saga.
Despite the recent financial turmoil and ongoing investigations, Genesis and FTX have agreed to settle their dispute. The conclusion of this investigation remains uncertain. Whether it will culminate into formal complaints or a clean chit for the companies involved, all players in the digital currency landscape will closely watch the unfolding of events.
None of the information on this website is investment or financial advice. CryptoMode is not responsible for any financial losses sustained by acting on information provided on this website.
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