Previously held CEO of Genesis, Michael Moro, has faced penalties from the United States Securities and Exchange Commission (SEC) due to his involvement in a 2023 lawsuit concerning the company’s parent organization, Digital Currency Group.
The organization known as Digital Currency Group, which specializes in investing in cryptocurrencies, has agreed to a settlement worth $38 million with the Securities and Exchange Commission (SEC). This is due to claims that they misled investors about the risks associated with the now-closed hedge fund Three Arrows Capital.
According to court papers submitted last Friday, January 17th, it is claimed that Digital Currency Group (DCG) deceived investors by using Genesis Global Capital, LLC, a subsidiary of theirs specialized in crypto lending, as the means for this deceit.
The Securities and Exchange Commission (SEC) alleges that GGC and DCG conspired over a $1.1 billion loan agreement to deceptively boost the lender’s financial records. In 2022, Genesis investors were not informed about this loan, an act that, according to the SEC, breached federal regulations.
By implementing the Note, we managed to enhance our assets’ value on the financial statement without revealing the specifics of the Note to GGC investors. This enabled Digital Currency Group and GGC to maintain ambiguity regarding whether and how Digital Currency Group intervened to resolve issues arising from TAC’s default.
SEC court filing
Previously serving as CEO of Genesis, Michael Moro consented to a fine of half a million dollars in civil penalties to resolve the allegations. The court also instructed him to stop any future infractions of federal regulations.
2023 saw Genesis filing for bankruptcy, revealing potential debt obligations of up to $10 billion and more than 100,000 claimants. Key lenders such as Gemini and VanEck were reportedly owed a collective sum of around $3 billion, based on court records.
Since 2023, regulatory bodies have been investigating Digital Currency Group (DCG) and its related entities following the numerous collapses within the industry that occurred in 2022. New York’s Attorney General has implicated DCG, Genesis, and crypto exchange Gemini for allegedly swindling approximately 29,000 investors out of $1 billion through the Gemini Earn Program. Previously, Genesis had reached a settlement with the SEC worth $21 million in connection with the lawsuit involving the Gemini Earn program.
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2025-01-17 21:32