As per Bloomberg, US authorities are looking into the internal financial transactions of Digital Currency Group (DCG), the parent company of Grayscale and troubled crypto lender Genesis.
Federal prosecutors in Brooklyn are reportedly looking at transfers between Digital Currency Group and Genesis.
The prosecutors are also investigating the information given to investors by DCG about those transactions. One of the people claimed that prosecutors have begun asking for interviews and documents.
The probe has been joined by the U.S. Securities and Exchange Commission. Both DCG and CEO Barry Silbert have not yet been charged with any misconduct in the investigations, which are still in their early stages.
The company stated “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.”
Genesis stated that it would refrain from commenting on any specific legal or regulatory concerns.
In November 2022, Genesis’ crypto-lending arm suspended withdrawals following the FTX crash. Genesis announced the Genesis derivatives business currently has around $175M in locked funds in the FTX trading account.
Recently, Gemini Earn users filed class action arbitration against Genesis and DCG. Genesis had been Gemini’s principal lending partner for its Earn service. But after Genesis halted redemptions, Gemini had to pause withdrawals from Gemini Earn on November 16, 2022.
