Genesis under attack: crypto lender and Digital Currency Group (DCG) face the SEC
Genesis under attack: crypto lender and Digital Currency Group (DCG) face the SEC

Genesis under attack: crypto lender and Digital Currency Group (DCG) face the SEC

By Andrea Porcelli - 9 Jan 2023

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SEC vs DCG and Genesis

US authorities are now digging into all the financial relationships between the two crypto companies headed by Barry Silbert. Digital Currency Group has already received many requests for documents and interviews from prosecutors working with the SEC.

Apparently, rumors say that there is also, an ongoing investigation involving only DCG, but it has not yet been confirmed. According to this rumor, the federal investigation involving only Barry Silbert’s Digital Currency Group began well before the FTX collapse in November. 

All the investigations still have no public part, only now are taking shape and still lack a clear charge, no one has been indicted, it is just being investigated for the time being. 

What is known is that the first rumors started coming out as early as last week, specifically on Wednesday, 4 December when crypto expert Andrew Abacus (@AP_Abacus) tweeted about the affair. 

“DCG has a strong culture of integrity and has always conducted its business legally. We have no knowledge or reason to believe that there is an Eastern District of New York investigation of DCG. Genesis maintains regular dialogue and cooperates with regulators and relevant authorities when it receives requests,”

is how an anonymous Genesis spokesperson put it, who denies the existence of an investigation and defends his company.

Barry Silbert’s Digital Currency Group galaxy is very large indeed; not only the crypto lender Genesis is part of it, but also other companies, including crypto exchange LUNO, crypto news company CoinDesk and Foundry Digital, a crypto mining service provider. 

Thus, one can sense that an investigation into Barry Silbert’s company would create no small stir. We are talking about news that if confirmed could create a scandal later on. 

Financial problems lead to Genesis cutting 30% of its staff

The company is well known to have been in an unstable situation financially since the collapse of FTX, large debts have put the company in trouble. On 4 January, however, the company announced another piece of bad news, Genesis faced staff cuts of about 30%. 

“As we continue to navigate unprecedented industry challenges, Genesis has made the difficult decision to reduce our global workforce. These measures are part of our ongoing efforts to move our business forward. We sincerely appreciate the hard work of our talented and dedicated team as we continue to work to identify the best outcome for Genesis’ business, customers and employees over the long term,”

said a Genesis spokesperson. 

Given the huge debts, this staff cut appears to be a solution to remedy the obligation to return money to the Winklevoss brothers’ Gemini exchange and many other companies. Genesis’ efforts to reduce its debt seem very serious, though it is always sad when the workforce loses out.

The Winklevoss twins and the ultimatum to DCG and Genesis

The clock is ticking and despite attempts, Genesis still has not paid off its debt, prompting Cameron Winklevoss, one of Gemini’s founding twins, to write a public letter. 

In the contents of the letter, Cameron points the finger at Barry Silbert, the CEO of Digital Currency Group, where he urges him to solve Genesis’ liquidity problems and settle the debt with Gemini. 

“Earn users are tired. They are afraid. Many are now in dire straits. Yet despite all they have had to endure, they have been extraordinarily patient and supportive. But they can only take so much more. They deserve a resolution to recover the assets they have lent to publicly commit to work together to resolve this problem by January 8, 2023. We are ready and willing to work with you, but time is running out.


Cameron Winklevoss.”

This ultimatum appears to be a last resort for the Winklevoss twins, now in the midst of a crisis and tired of various attempts to approach Barry Silbert and his companies. 

Gemini’s exchange president believes that too much time has passed since the collapse of FTX, which put Genesis in crisis, and he wants his money back. 

The spirit that moves the Winklevosses to this point is the strong desire they have to repay their users, who are now tired of the months that have passed without getting their assets back. 

The situation in which Digital Currency Group and Genesis now find themselves is very critical; a probable investigation would be another step that would move Gemini away from its claim. 

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