Legal Probe Now Targets Digital Currency Group’s Financial Dealings With Genesis

Key Points:

• New York’s Attorney General probes Digital Currency Group’s ties with Genesis Global Capital.
• Genesis faced regulatory issues in the past; the investigation focuses on financial dealings.
• DCG cooperates with authorities; Letitia James asserts a regulatory role in the crypto sector.

New York’s top law enforcement officer, Attorney General Letitia James, has initiated an investigation into Digital Currency Group’s (DCG) financial transactions involving its subsidiary Genesis Global Capital, according to Bloomberg.

Sources revealed that James’s office had requested information from former Genesis executives, including ex-chief risk officer Michael Patchen, who was recently questioned.

The inquiry focuses on DCG‘s relationship with Genesis, which filed for bankruptcy protection earlier this year following losses linked to the collapse of Three Arrows Capital and FTX exchange.

The investigation is the latest in a series involving Genesis. The US Securities and Exchange Commission previously sued both Gemini and Genesis over the Earn program, alleging unregistered securities offerings.

Moreover, state securities regulators in Alabama probed Genesis for potentially soliciting investments without proper registration.

The New York Attorney General’s office has reached out to former Genesis executives, including Michael Patchen, for information.

Federal prosecutors and the SEC are already conducting investigations into Genesis and its parent company, DCG. The cryptocurrency lender experienced significant losses last year due to market fluctuations and the collapse of Three Arrows Capital and FTX.

DCG stated its willingness to cooperate with regulatory bodies and investigative agencies, emphasizing its commitment to ethical business practices.

This probe emerges as Letitia James aims to solidify her position as a key regulator in the crypto industry. She has previously expressed concerns about the sector and proposed a state law to tighten cryptocurrency company regulations.

DCG emphasized its commitment to lawful and ethical business practices, stating its cooperation with regulators and investigative agencies.

The outcome of these investigations remains uncertain, but the ongoing scrutiny reveals the increasing regulatory spotlight on cryptocurrency operations.

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