Crypto Giant DCG Probed by New York Attorney General Over Ties With Genesis: Report

New York Attorney General Letitia James is reportedly investigating Barry Silbert’s Digital Currency Group (DCG) over its past affiliation with bankrupt crypto lender Genesis Global Capital.

DCG is the parent company of Genesis, which filed for bankruptcy in January after sustaining large losses from the collapse of crypto hedge fund Three Arrows Capital (3AC) and digital asset exchange FTX.

Bloomberg reports that in recent months, Attorney General James has been requesting information from former Genesis executives, including the firm’s ex-chief risk officer, Michael Patchen.

The report says federal prosecutors and the U.S. Securities and Exchange Commission (SEC) have started their investigation and are seeking to interview potential witnesses from both Genesis and DCG.

One of the focal points for the investigation for regulators and prosecutors is a  $1.1 billion promissory note that Silbert says came about to assume liabilities from Genesis for the collapse of 3AC.

People familiar with the matter say the probe was not made public. It is also unclear if the investigation will lead to the filing of complaints. 

Earlier this year, Gemini publicly addressed Silbert and DCG, claiming that the giant had defaulted on a $630 million debt payment to the crypto exchange.

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