Following accusations by Gemini co-founder Cameron Winklevoss in an open letter to Digital Currency Group CEO Barry Silbert, a report citing “people familiar with the matter” indicates that federal prosecutors in New York are looking closely at transfers between Digital Currency Group and its subsidiary, Genesis Global Capital.
A report claims that Digital Currency Group and Genesis Global Capital are reportedly under scrutiny by federal prosecutors in New York.
According to a report recent letter from Cameron Winklevoss, co-founder of crypto-currency exchange Gemini, Digital Currency Group (DCG) has until January 8, 2023 to resolve liquidity issues between Gemini and Genesis Global Capital’s lending unit. It has been reported that Genesis owes $900 million to Gemini Earn customers and that the lending arms of both companies have stopped withdrawals since mid-November 2022.
Reports have revealed that Genesis has been severely impacted by the collapse of FTX and Alameda Research and that Gemini has recently faced a financial crisis. informed that it may be the subject of a potential class action lawsuit in the matter. Bloomberg says federal investigators are getting involved and are reportedly looking into the transactions between Digital Currency Group (DCG) and Genesis. “People familiar with the matter” who requested anonymity, told the publication that prosecutors in the Eastern District of New York and the U.S. Securities and Exchange Commission (SEC) are investigating the matter.
Bloomberg reached out to Silbert for comment, and a spokesman for Digital Currency Group (DCG) responded. “DCG has a strong culture of integrity and has always conducted its business in a legal manner. We have no knowledge of or reason to believe that there is an Eastern District of New York investigation of DCG“, a company spokesperson said in a statement. The news outlet also reported that “the SEC and the U.S. Attorney’s Office for the Eastern District of New York declined to comment“.
The Bloomberg editorial follows a series of reports of alleged investigations by U.S. authorities into crypto-currency companies that either resulted in enforcement, never materialized, or have yet to materialize. Over the past 12 months, reports citing “persons with knowledge of the case” said U.S. investigators are looking into the following crypto-currency companies auditors of crypto reserves, American taxpayersThree arrows capital, Twitter, Coinbase, Binanceand Uniswapamong others.