DCG and Genesis pay the price for 2022 missteps — a $38.5m fine from SEC
Digital Currency Group, founded by Barry Silbert and former Genesis Global Capital CEO Michael Moro, will pay $38.5 million to settle US Securities and Exchange Commission charges that it misled investors about Genesis’s financial health.
The SEC announced the settlement on Friday, stating that DCG and Moro “painted a misleadingly rosy picture” of the firm’s financial condition following the June 2022 collapse of major borrower Three Arrows Capital.
This default compromised Genesis’s business, yet the company downplayed the impact in public statements.
Sanjay Wadhwa, acting director of the SEC’s Division of Enforcement commented that “DCG and Moro fell short,” in providing the necessary transparency.
DCG did not admit or deny the SEC’s findings.
Genesis, a former DCG subsidiary, filed for bankruptcy in January 2023 with $3.4 billion in creditor claims.
In August 2024, the firm completed restructuring and began distributing $4 billion in assets to creditors.
Bitcoin holders recovered 51% of their claims, while stablecoin creditors received full reimbursement.
The settlement is part of a wave of crypto enforcement actions as the Biden administration nears its end.
Regulators are aiming to clear dockets before a more crypto-friendly Trump administration takes office.
Crypto market movers
- Bitcoin has been up 1.1% over the past 24 hours, trading at $103,100.
- Ethereum is down 3% over the same period to $3,285.
What we’re reading
- Litecoin ETF hopes fuel 31% surge. Why experts bet it might beat XRP and Solana ― DL News
- Crypto Ball to Celebrate Trump’s Return Marks Hope for New Era of Policymaking ― CoinDesk
- Solana’s Inflation Rate Could Drop Under Multicoin Proposal ― Unchained
- Brace for volatility! This weekend could get wild ― Milk Road
- XRP blows away Bitcoin with 14% surge and explosion of interest on Google ― DL News
Kyle Baird is DL News’ Weekend Editor. Got a tip? Email at kbaird@dlnews.com.
