The SEC claims that Digital Currency ignored the events of 2022, when the hedge fund Three Arrows Capital, one of the largest borrowers of Genesis Global Capital, a subsidiary of the group, faced a default and was unable to meet its obligations.
Even though Three Arrows’ default jeopardized Genesis’s business, the company’s investors were misled by claims of a successful recovery from the crisis, SEC officials insist. According to them, the Digital Currency administration downplayed the consequences of the default and exaggerated its assistance to solve Genesis’s financial problems.
When Genesis filed for bankruptcy in 2023, it found that the company had more than 100,000 creditors and nearly $10 billion in outstanding obligations. Former Genesis CEO Soichiro Moro agreed to a settlement with the SEC and will pay a $500 civil penalty. 000, admitting a charge of negligence.
Earlier, the New York Attorney General’s Office (NYAG) stated that the volume of fraud committed by Digital Currency Group was significantly larger than initially expected and exceeded $3 billion.
Source: Bits

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