Digital Currency Group Faces SEC Actions Over Misleading Crypto Disclosures
by aria-crypto.com
January 18, 2025 at 18:35
Digital Currency Group Faces SEC Actions Over Misleading Crypto Disclosures
The U.S. Securities and Exchange Commission (SEC) has enforced a strict $38 million penalty against Digital Currency Group (DCG) and its subsidiary, Genesis. The penalty arises from charges of misleading investors about financial conditions following a substantial default by borrower Three Arrows Capital. According to the SEC, DCG and former Genesis CEO Soichiro “Michael” Moro presented a falsely robust image of Genesis's financial health. Specifically, the misleading information was circulated during a critical time when Genesis faced severe liquidity issues, leading the firm to halt customer withdrawals and eventually declare bankruptcy in January 2023. Adding to their woes, Moro is also accused of making deceptive claims on social media about the company's financial strength and operational stability. In resolving these charges, both DCG and Moro agreed to pay the fines without admitting to or denying the allegations brought forth by the SEC. This settlement marks a significant development in regulatory oversight within the unstable realms of the cryptocurrency industry.
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