Saturday, June 22, 2024

New York Attorney General Initiates Investigation into DCG’s Relationship with Genesis

New York Attorney General Letitia James is currently conducting an inquiry into Digital Currency Group (DCG), led by Barry Silbert, due to its historical connection with the now insolvent cryptocurrency lender, Genesis Global Capital.

Genesis, a subsidiary of DCG, filed for bankruptcy in January following substantial losses incurred from the collapse of the cryptocurrency hedge fund, Three Arrows Capital (3AC), and the digital asset exchange, FTX.

According to Bloomberg, Attorney General James has been actively seeking information from former Genesis executives, notably including Michael Patchen, the firm’s former chief risk officer.

This investigation has garnered the attention of federal prosecutors and the U.S. Securities and Exchange Commission (SEC), both of whom are commencing their own examinations and aiming to interview potential witnesses affiliated with both Genesis and DCG.

Of particular interest to regulators and prosecutors is a $1.1 billion promissory note that Barry Silbert claims was established to assume liabilities from Genesis pertaining to the collapse of 3AC.

Sources familiar with the situation indicate that this investigation has been kept confidential, and it remains uncertain whether any formal complaints will be filed as a result.

Earlier this year, Gemini publicly raised concerns about Silbert and DCG, alleging that the company had defaulted on a significant $630 million debt payment owed to the cryptocurrency exchange.

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Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial or investment advice. Cryptocurrency investments are subject to market risks, and individuals should seek professional advice before making any investment decisions.

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