Digital Currency Group, the parent company of Grayscale and lending firm Genesis Trading, is currently under investigation by the US Securities and Exchange Commission and Department of Justice.
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US Prosecutors Launch Investigation Into DCG
The news was disclosed in a Friday report by Bloomberg, according to the report, DCG is being investigated by the US prosecutors over internal transfers between DCG and the embattled crypto lender Genesis Trading, citing sources with knowledge of the matter, additionally, the prosecutors are also looking into the information DGC provided to investors about the transfers.
According to sources, US prosecutors have started looking into the company’s internal documents and the US SEC has also joined the prosecutors in the DCG probe.
As of press time, the investigation is still in the early stage and DCG is yet to be accused of any wrongdoings, while responding to the matter, DCG noted that;
“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.”
Also, the DCG subsidiary Genesis Trading said it will not be commenting on matters related to regulation and any specific legal matters. “Genesis maintains regular dialogue and cooperates with relevant regulators and authorities when it receives inquiries,” Genesis affirmed.
Since the sudden collapse of the Bankman-Fried FTX cryptocurrency exchange, the lending firm Genesis Trading has been facing insolvency issues, leading to Genesis pausing withdrawals on its platform.
As the matter continues to grow, it dragged its parent company DCG into the issue, although, DCG has distanced itself from the matter, noting that it is not concerned about Genesis’s insolvency issues.
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