Embattled crypto group DCG is reportedly under investigation by US prosecutors over money transfers at lending arm Genesis
Crypto conglomerate Digital Currency Group is under investigation by US prosecutors over money transfers at its brokerage subsidiary Genesis,The Securities and Exchange Commission and the US Department of Justice's Eastern District of New York office are looking into financial transfers between DCG and Genesis' crypto-lending unit, called Genesis Global Capital, it said.
The US authorities are also probing what investors were told about those transactions, Bloomberg said in its report late Friday, citing people familiar with the matter.to sort out its rocky financial situation, defended its practices and said it wasn't aware of any New York probe. "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 company told Bloomberg.
Pressure is piling up on DCG following the implosion of Sam Bankman-Fried's FTX crypto empire. The Genesis parent closed down its wealth management unit last week, citing a"crypto winter" and significant headwinds to the industry.customer withdrawals after FTX's collapse triggered a flood of outflows, draining the firm's liquidity. Genesis' derivatives business had $175 million locked in FTX trading accounts.
Brokerage Genesis also faces major losses as a result of loans it made to Three Arrows Capital, and it has filed a claim for
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