US authorities are reportedly digging into the internal dealings of Digital Currency Group, the parent company of several crypto firms including Genesis Trading and Grayscale Investments, focusing on transfers between its companies and what investors were told about them.
Prosecutors started requesting interviews and documents from the crypto firm, while the Securities and Exchange Commission (SEC) is also conducting an investigation. Neither Digital Currency Group, its CEO Barry Silbert, nor any of its subsidiaries have been accused of wrongdoing.
Genesis Trading, a DCG subsidiary that halted withdrawals and new loan originations after the collapse of FTX in November in a move that affected other crypto firms, said in a statement that it doesn’t comment on specific legal or regulatory matters, and that it “maintains regular dialogue and cooperates with relevant regulators and authorities when it receives inquiries.”
A DCG spokesperson said the firm has a “strong culture of integrity and has always conducted its business lawfully,” and added the company has “no knowledge of or reason to believe that there is any Eastern District of New York investigation into DCG.”
The investigation into DCG reportedly started before the collapse of FTX. DCG has said it’s insulated from the troubles Genesis Trading is facing. Gemini has recently pushed DCG to find a solution to these problems, which left $900 million worth of users’ funds locked.
Last week, DCG shut down its subsidiary focused on wealth management, HQ Digital, due to the “state of the broader economic environment and prolonged crypto winter presenting significant headwinds to the industry.”
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- Source: https://www.cryptocompare.com/email-updates/daily/2023/jan/09/
