Digital Currency Group Under Investigation By US Authorities: Report

According to a Bloomberg report, cryptocurrency conglomerate Digital Currency Group (DCG) is under investigation by the U.S. Department of Justice’s Eastern District of New York (EDNY) and the Securities and Exchange Commission (SEC).

Authorities are investigating internal transfers between DCG and its subsidiary, crypto lending firm Genesis Global Capital, the report said, citing people familiar with the matter. Prosecutors have already requested interviews and documents from both companies, and the SEC is conducting similar early-stage investigations.

To date, no charges have been filed against DCG, and US officials have not provided any information about the incident. A DCG spokesperson said the company was unaware of the investigation.

“DCG has a strong culture of integrity and has always done business legally.

Genesis is one of the companies affected by the contagious wave that followed the collapse of FTX in November. He has $175 million locked in his FTX trading account, according to a November 10 company disclosure. Genesis suspended its exit on Nov. 16 due to liquidity issues and struck a deal with investment bank Moelis & Company to help with the restructuring.

RELATED: Genesis tells clients financial troubles need more time after Gemini calls for action

Genesis owes $900 million to crypto exchange Gemini. They co-operate a product called Gemini Earn that allows crypto investors to earn his 8% interest on crypto loans. Gemini claims that payments to Gemini’s clients failed because DCG failed to repay Genesis.

DCG’s other subsidiaries include Grayscale Investments, media outlet CoinDesk, cryptocurrency exchange Luno, and bitcoin mining company Foundry. Cointelegraph found most of the Grayscale trust funds trading at discounted prices, with Ethereum Classic Trust having the highest discount on Jan. 4 at 77%, followed by Litecoin Trust at 65%. Bitcoin Cash Trust reportedly trading at 57%.