Digital Currency Group Agrees to $38 Million SEC Settlement

Digital Currency Group (DCG) and former Genesis CEO Soichiro 'Michael' Moro have agreed to pay $38.5 million to settle charges from the SEC for misleading investors about the financial health of Genesis Global Capital, which filed for bankruptcy in January 2023. The SEC accused DCG of failing to disclose significant losses incurred from Three Arrows Capital, a major borrower that defaulted on a $2.4 billion loan, thus misleading investors about Genesis's stability. The regulator emphasized that DCG's actions created a false impression of financial health during a period of severe industry turmoil. DCG and Moro settled without admitting or denying the allegations, with Moro also facing a separate penalty of $500,000. The case highlights ongoing concerns about transparency and accountability in the cryptocurrency sector, especially following the collapse of major firms. The settlement reflects the SEC's commitment to safeguarding investor interests amidst the rapidly evolving crypto landscape.