Budrigantrade com otzyvy-U. S. Is Investigating DCG crypto empire
Budrigantrade com otzyvy-U. S. Is Investigating DCG crypto empire
2023.01.07 11:30
Budrigantrade com otzyvy-U. S. Is Investigating DCG crypto empire
Budrigantrade.com – According to people familiar with the situation, US authorities are looking into Barry Silbert’s extensive crypto empire’s internal financial dealings.
People who spoke on condition of anonymity because the investigation has not been made public said that transfers between Digital Currency Group Inc. and a troubled subsidiary that provides crypto lending services are the subject of an investigation by federal prosecutors in Brooklyn. They are also looking into the information provided to investors regarding those transactions.
One of the individuals stated that interviews and documents have begun to be requested by the prosecution. Another individual stated that an investigation is also being carried out by the Securities and Exchange Commission. None of Silbert, Digital Currency Group, or any of its subsidiaries have been accused of wrongdoing, and the investigations are still in their early stages.
A DCG spokesperson was contacted for comment by Silbert. The company stated in a statement, “DCG has always conducted its business lawfully and has a strong culture of integrity.” We are unaware of or have no reason to believe that DCG is the subject of an investigation in the Eastern District of New York.
In a statement, Genesis, the subsidiary whose unit provides lending services, stated that it does not provide specific legal or regulatory commentary. “When Genesis receives inquiries, it cooperates with relevant regulators and authorities and maintains regular dialogue with them,” it stated.
The SEC and the US Attorney’s Office for the Eastern District of New York did not respond to requests for comment. Which intercompany activity specifically is under scrutiny is unclear.
After Genesis suffered significant losses as a result of the collapse of hedge fund Three Arrows Capital in the previous year, cracks began to appear in Silbert’s Digital Currency Group’s dominance. The web of financial relationships at DCG came under increased scrutiny toward the end of 2022 as the crypto crisis got worse.
More details: Following the sudden and spectacular collapse of crypto exchange FTX in November, financial pressure increased further. Genesis Balance Sheet reveals a web of loans across the Silbert Empire. Genesis Global Capital, Genesis’ lending arm, was particularly hard hit, preventing new loan applications and customer withdrawals. The freeze is still in effect.
According to a person with knowledge of the criminal investigation, the investigation into Silbert’s empire began prior to FTX’s collapse.
DCG, on the other hand, has stated that it is shielded from Genesis’ problems.
Silbert disclosed in a letter to shareholders in November that DCG had received loans from Genesis Global Capital totaling approximately $575 million that were due in May. Additionally, Silbert mentioned a $1.1 billion promissory note that was due in June 2032 as a result of DCG taking on Genesis’ liabilities for its exposure to Three Arrows. DCG’s founder and chief executive officer is Silbert.
According to Silbert, intercompany loans between DCG and Genesis were “always structured on an arm’s length basis and priced at prevailing market interest rates,” and they were made in the normal course of business.
One of the last crypto-based empires, DCG has a vast reach: Digital asset manager Grayscale Investments, which oversees a Bitcoin trust worth multiple billions of dollars, is also under its control in addition to Genesis.
Foundry Digital, a crypto-mining service provider, CoinDesk, a news publication, and Luno, a London-based exchange that it acquired in 2020, are all subsidiaries of DCG, which was once valued at $10 billion.
On Thursday, the conglomerate said that wealth manager HQ would close at the end of the month. Additionally, DCG reported that Genesis Global Trading Inc., the brokerage division of Genesis, was laying off approximately 30% of its employees.
Silbert and Cameron Winklevoss, co-founder of Gemini Trust Co., have been publicly at odds.
The product that allows users to earn high yields on their cryptocurrency holdings while preventing withdrawals is offered by Gemini and Genesis Global Capital. Since the middle of November, customers have not been able to withdraw money from the Earn product.
Winklevoss claimed that DCG and Genesis are “beyond commingled,” and that Silbert had slowed down efforts to resolve the issue.
In response, in a tweet, Silbert denied several of Winklevoss’ allegations. He stated that DCG had sent a proposal to Winklevoss’ advisers and Genesis on December 29 but had not received a response. He added, “DCG has never missed a payment to Genesis for interest and is current on all outstanding loans.”
