Barry Silbert’s DCG Faces SEC and DOJ Investigation Over Internal Transfers

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• Bloomberg reported that Barry Silbert’s DCG is facing an investigation from the SEC and the DOJ over internal transfers related to its subsidiary lender Genesis.
• The prosecutors have sent DCG requests for documents and interviews.
• A DCG spokesperson told Bloomberg that the company doesn’t know anything about active investigations into its businesses.

Barry Silbert’s Digital Currency Group (DCG) is under investigation by the U.S. Securities and Exchange Commission (SEC) and the Department of Justice.

According to a report by Bloomberg, the regulators are investigating DCG’s subsidiary lender Genesis over suspicious internal transfers. DCG has received requests for documents and interviews from prosecutors in the Eastern District of New York.

The investigation has yet to become public. A DCG spokesperson told Bloomberg that the company is unaware of any active investigations into its business activities.

“DCG has a strong culture of integrity and has always conducted its business lawfully. We have no knowledge of or reason to believe there is any Eastern District of New York investigation into DCG,” the spokesperson said.

Missed Gemini’s Deadline

Silbert has been facing increasing pressure from industry players related to Genesis’ decision to pause loan redemptions and new loan issuance in late November.

A week ago, Gemini co-founder Cameron Winklevoss published an open letter accusing Silbert of “bad faith stalling techniques” and the unwillingness to communicate with Gemini. The exchange used Genesis as its Earn program partner.

Winklevoss also said that DCG and Genesis are “beyond commingled” and issued an ultimatum to Silbert asking him to publicly commit to solving the issue by January 8. Silbert responded, denying the accusations but offering no public commitment.

And it seems like Silbert has failed to meet Gemini’s deadline. It’s unclear what’s going to happen next between Genesis and Gemini.

On the Flipside

• Neither Silbert nor DCG is facing any criminal charges yet.
• It’s unclear what exactly transactions the regulators are looking at.

Why You Should Care

Barry Silbert’s DCG is one of the largest crypto empires in existence. If regulators find illegal activity and DCG goes down, that would mean another reputational blow to the crypto industry.

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