Digital Currency Group Settles SEC Fraud Charges for $38.5 Million

The crypto firm and its former Genesis CEO faced penalties for misleading investors about the financial health of its lending unit during a period of market instability.

Digital Currency Group (DCG) and former Genesis CEO Soichiro Moro agreed to pay $38.5 million in civil penalties to settle SEC charges of misleading investors.
The SEC found that DCG and Genesis downplayed the financial impact of the 2022 collapse of Three Arrows Capital, Genesis’s second-largest borrower, which caused over $1 billion in losses.
DCG allegedly issued a promissory note to Genesis to create the impression of liquidity while publicly misrepresenting the lending unit's financial stability.
Neither DCG nor Moro admitted or denied the SEC's findings, but both agreed to a cease-and-desist order as part of the settlement.
This settlement follows a separate $2 billion agreement in May 2024 with the New York Attorney General to compensate defrauded Genesis investors.