Report: DOJ and SEC Investigating DCG Crypto Conglomerate

  1. Both the DOJ and the Securities and Exchange Commission are in early stages of investigating DCG.
  2. DCG-Genesis financial transfers appear to be the focus of the investigation.
  3. DCG nad Genesis have not yet been accused of wrongdoing.

Recently, it has been reported that the government of the United States is conducting an investigation into Digital Currency Group (DCG), the parent company of CoinDesk as well as the owner of the troubled cryptocurrency brokerage Genesis and the digital asset manager Grayscale.

According to Bloomberg reports, prosecutors from the Eastern District of New York office of the Department of Justice have requested interviews and documents from DCG and Genesis, and the Security and Exchange Commission (SEC) appears to be in the same early stages of its own investigation at this time. According to the findings of the investigation, neither Genesis nor DCG, the parent company of CoinDesk, have “yet been accused of wrongdoing” in any capacity.

According to the report, the investigations seem to be focusing on how Genesis and DCG’s financial statements affect each other. Spokesperson from both Genesis and DCG did not respond immediately to requests for comment. Friday, a spokesperson for DCG told Bloomberg that the company didn’t know that EDNY was looking into anything. At the same time, a spokesperson for Genesis stated to the same outlet that the company “maintains regular dialogue” with regulators but would not comment on any particular issues.

Also there have been issues with Grayscale, another DCG subsidiary, and its primary bitcoin trust product. A lack of confidence in the product or in investors’ ability to cash out is reflected in the fact that the discount between the price of a share of the trust and the price of bitcoin has widened to more than 50% in the past month.

In related news, DCG announced on Thursday that it would be closing its HQ. DCG said they were taking this action because of the industry’s vulnerability to the current economic climate and the ongoing crypto winter. The shuttering of HQ will take place effectively on January 31 this year.

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Kelvin enjoys writing about cryptocurrency and blockchain. He started blogging in 2019 and switched to cryptocurrency in 2020. Kelvin is interested in technology, football, chess, and Defi. He wants decentralization to benefit everyone on the planet.