Silbert’s DCG is being investigated by DOJ, SEC over internal transactions Silbert’s DCG is being investigated by DOJ, SEC over internal transactions
Barry Silbert's crypto empire the Digital Currency Group said it has "always conducted its businesses lawfully."
2 min read
Updated: Aug. 14, 2023 at 2:08 am UTC
dsearls / CC BY 2.0 / Flickr. Remixed by CryptoSlate
The U.S. Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) have opened investigations into Barry Silbert’s Digital Currency Group (DCG) to examine its internal money transfers and loans, as reported by Bloomberg News.
Prosecutors are looking into the transfers between the DCG, an embattled subsidiary of the company, who asked not to be named because the probe hasn’t been made public yet. The investigation also includes DCG investors and aims to discover if they were informed regarding these transfers and internal loans.
A DCG spokesperson commented on the matter upon Silbert’s request and told Bloomberg:
“DCG has a strong culture of integrity and has always conducted its business lawfully. We have no knowledge of or reason to believe there is any Eastern District of New York investigation into DCG.”
At the moment, neither DCG nor Silbert are accused of any wrongdoing. However, the investigation is active, and prosecutors have asked for interviews and documents. The SEC and the DOJ have declined to comment on the matter.
Genesis
Crypto lender Genesis also got involved in the investigations as one of the subsidiaries of the DCG. The company said it didn’t comment on specific legal matters and added:
“Genesis maintains a regular dialogue and cooperates with relevant regulators and authorities when it receives inquiries,”
DCG took a heavy hit over Genesis’ financial troubles. In addition, Genesis was heavily affected by the collapse of Three Arrows Capital (3AC), one of the companies that declared bankruptcy after the Terra-Luna crash.
The FTX collapse a few months later didn’t help Genesis’ healing process. Shortly after the FTX collapse, on Nov. 16, Genesis halted customer withdrawals. Then, on Jan. 5, the lender laid off 30% of its staff and signaled it might file for chapter 11 bankruptcy by saying it is trying to reduce costs and increase efficiency.
The troubles of Genesis got connected to the crypto exchange Gemini. Gemini founders, the Winklevoss twins, claimed that Silbert owed Genesis $1.675 billion, and a part of this dept belonged to Gemini’s Earn program users.
Even though Silbert replied to the twins and said that the DCG didn’t have any outstanding debt to Genesis, the twins refused to accept and asked Silbert to stop pretending as if he and the DCG were “innocent bystanders and had nothing to do with creating this mess.”
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Zeynep Geylan
Zeynep is an academic who turned to crypto in 2018. Originating in social sciences, she is especially interested in the social impact of blockchain and cryptocurrencies and strongly believes in their transmuting power.
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In this article
Bitcoin, a decentralized currency that defies the sway of central banks or administrators, transacts electronically, circumventing intermediaries via a peer-to-peer network.
Digital Currency Group
Digital Currency Group’s mission is to accelerate the development of a better financial system.
Genesis
Genesis is an institutional digital asset markets and a full-service digital currency prime brokerage providing a single point of access for select qualified individuals and global institutional investors.
Gemini
Gemini is a regulated digital asset exchange and custodian that allows customers to buy, sell, store, and stake digital assets in a regulated, secure, and compliant manner.
Barry Silbert, recognized as a foundational figure in the cryptocurrency landscape, serves as the CEO and founder of Digital Currency Group (DCG).
Cameron Winklevoss, a renowned figure in the cryptocurrency sector, is a Harvard University graduate with a degree in Economics and holds an MBA from Oxford University.
Tyler Winklevoss, known for his pioneering role in the cryptocurrency realm, is a Harvard University alumnus with a degree in Economics and holds an MBA from Oxford University.