Barry Silbert, founder and CEO of Digital Currency Group Inc., speaks at the Skybridge Alternatives (SALT) conference on Thursday, May 9, 2019 in Las Vegas, Nevada, USA.
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Digital Currency Group, the cryptocurrency company founded by Barry Silbert, and former executives from its defunct division are paying $38.5 million to the SEC for misleading investors.
In a statement FridayThe agency said DCG and Soichiro “Michael” Moro, former chief executive officer of cryptocurrency finance company Genesis Global Capital, will pay a civil penalty for misleading investors about Genesis' financial condition. Announced.
Genesis, once a core company in DCG, became one of several victims of the industry contagion caused by the collapse of FTX. The company filed for Chapter 11 bankruptcy protection in January 2023.
“Especially in times of financial uncertainty and turmoil, it is critical that companies and their executives tell the truth to the investing public,” Sanjay Wadhwa, acting director of the SEC's Division of Enforcement, said in a statement. “The Commission finds that DCG and Moro are deficient in that respect.”
Wadhwa added that DCG and Moro “painted a misleading rosy picture” by not being transparent about the company's financial issues.
The incident dates back to June 2022. The SEC said Genesis' major borrower, the cryptocurrency hedge fund Three Arrows, defaulted on a margin call, “harming Genesis' business.” The agency said DCG and Moro had “downplayed” the impact of the losses in some social media posts retweeted by DCG executives.
A DCG spokesperson said in an emailed statement that the company is “pleased” the investigation has concluded.
“DCG always strives to conduct its business with the highest integrity, and we believe our actions with respect to Genesis are consistent with that approach,” the company said. “This settlement allows us to focus on our growth efforts and continue to benefit from the positive momentum in our industry.”
DCG and Moro paid the fines without admitting or denying the SEC's findings that they violated the Securities Act of 1933, the commission said in a statement.
May 2024 New York Attorney General Letitia James Separate payment He demanded $2 billion from Genesis to repay defrauded investors.
clock: Cryptocurrency broker Genesis files for Chapter 11 bankruptcy
