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Home CRYPTO

SEC Charges Lead to $38 Million Settlement with Digital Currency Group: Here is the Truth

by Sham
January 17, 2025
in CRYPTO, POLITICS
Reading Time: 2 mins read
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  • DCG agreed to a $38 million settlement with the SEC over misleading investors about Genesis’s financial health.
  • The SEC claims DCG hid losses tied to the $2.4 billion default of Three Arrows Capital in 2022.
  • Former Genesis CEO Soichiro Moro will pay $500,000 in a separate settlement for his role in the case.

Digital Currency Group (DCG) has agreed to pay $38 million to settle charges from the SEC over allegations tied to the collapse of its lending arm, Genesis Global Capital. The settlement resolves claims that the company misled investors and neglected to disclose the true financial struggles of its division.

JUST IN: 🇺🇸 SEC sues Digital Currency Group for misleading investors 👀 pic.twitter.com/7DL2cO3AJL

— BlockNews (@blocknewsdotcom) January 17, 2025

SEC’s Accusations

According to the SEC, DCG downplayed the fallout from a major borrower default in mid-2022. The borrower, Three Arrows Capital, owed Genesis $2.4 billion but collapsed during the Terra ecosystem’s crash, leaving Genesis facing over $1 billion in losses. Despite this, DCG allegedly presented a misleadingly stable front to the public about Genesis’s financial health.

finextra.com

Details of the Settlement

The SEC filing claims DCG failed to exercise “reasonable care,” creating a false impression of Genesis’s viability. Former Genesis CEO Soichiro “Michael” Moro was also implicated and agreed to pay a $500,000 settlement for his role in the situation. Both DCG and Moro resolved the charges without admitting or denying the allegations.

Broader Implications

This case highlights the ongoing scrutiny of the crypto industry and its handling of financial transparency. The downfall of Three Arrows Capital and its ripple effects continue to underscore the fragile interconnectedness within the crypto space, with regulators pressing for accountability at every level.

Tags: cryptoDigital Currency GroupGenesis Global CapitalsecThree Arrows Capital
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