New York Attorney General Letitia James is reportedly investigating Barry Silbert’s Digital Currency Group (DCG) over its past ties to bankrupt cryptocurrency lender Genesis Global Capital.
DCG is the parent company of Genesis, which filed for bankruptcy in January after taking large losses from the collapse of crypto hedge fund Three Arrows Capital (3AC) and digital asset exchange FTX.
Bloomberg reports that Attorney General James has been requesting information from former Genesis executives in recent months, including the company’s ex-chief risk officer Michael Patchen.
The report says federal prosecutors and the U.S. Securities and Exchange Commission (SEC) have begun their investigation and are seeking to interview potential witnesses from both Genesis and DCG.
One of the focus of the investigation for regulators and prosecutors is a $1.1 billion promissory note that Silbert says came about to assume liabilities from Genesis for the collapse of 3AC.
People familiar with the case say the investigation has not been made public. It is also unclear whether the investigation will lead to complaints being filed.
Earlier this year, Gemini publicly addressed Silbert and DCG, claiming that the giant failed to pay a $630 million debt payment to the crypto exchange.
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