Prosecutors Examining Digital Currency Group Over Genesis Transfers, Bloomberg Reports
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Prosecutors Examining Digital Currency Group Over Genesis Transfers, Bloomberg Reports

All of this comes as Genesis battles to avoid bankruptcy after suffering a series of devastating blows during the bear market.

Prosecutors Examining Digital Currency Group Over Genesis Transfers, Bloomberg Reports

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Digital Currency Group is being scrutinized by federal prosecutors in the U.S., according to a Bloomberg report.

Anonymous sources told the news outlet that investigators are examining transfers between DCG and Genesis, its embattled crypto lending arm.

Particular documents and interviews are now reportedly being requested — and the Securities and Exchange Commission is also said to have launched an investigation.

However, the Bloomberg report stressed that Genesis, DCG and its CEO, Barry Silbert, have not been accused of wrongdoing. A statement from the company said:

"DCG has a strong culture of integrity and has always conducted its business lawfully. We have no knowledge of or reason to believe that there is any Eastern District of New York investigation into DCG."

Meanwhile, Genesis added that it "maintains regular dialogue and cooperates with relevant regulators and authorities when it receives inquiries."

All of this comes as Genesis battles to avoid bankruptcy after suffering a series of devastating blows during the bear market.

It suffered losses of $1.2 billion when crypto hedge fund Three Arrows Capital went bust, and Genesis now owes hundreds of millions of dollars to other businesses in the space.

Genesis had a key role in the Earn program offered by the crypto exchange Gemini, which offered interest rates of up to 8%. But since withdrawals were halted in November, 340,000 customers have been frozen out of an estimated $900 million.

A war of words has now broken out, with Gemini co-founder Cameron Winklevoss accusing Barry Silbert of engaging in "bad faith stall tactics" as a solution is sought.
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