Digital Currency Group faces NY probe over linkage to troubled Genesis: Bloomberg

Digital Currency Group is facing a probe from New York’s leading law enforcement officer over its financial dealings with subsidiary Genesis Global Capital, according to a report from Bloomberg News. 

Over the last few months, New York Attorney General Letitia James’ office has asked for information from former executives of Genesis, including former Genesis chief risk officer Michael Patchen, Bloomberg reported on Friday, citing people familiar with the matter. 

Genesis Global filed for bankruptcy protection earlier this year after taking a financial hit following the collapses of the crypto hedge fund Three Arrows Capital and the FTX exchange last year. 

Trouble for Genesis 

This is not the first time Genesis has been the subject of investigations. The Securities and Exchange Commission sued both crypto exchange Gemini and the crypto firm earlier this year and said that the Earn program constituted an unregistered offer and sale of securities under U.S. law.

Genesis too was investigated by state securities regulators late last year, according to Barron’s. Alabama was looking into whether Genesis, among other firms, "enticed residents to invest in crypto-related securities without making the proper registrations."

DCG and the New York attorney general’s office did not immediately respond to a request for comment. 

A DCG spokesperson told Bloomberg that the company is helping regulators and investigative agencies upon request.