DCG and Former CEO Moro Agree to Pay $38.5 Million in SEC Settlement
Digital Currency Group (DCG) and former Genesis CEO Soichoro “Michael” Moro will pay a total of $38.5 million to settle securities fraud charges with the U.S. Securities and Exchange Commission (SEC).
- DCG will pay $30 million in fines, while Moro is liable for $500,000.
- Both parties agreed to a cease-and-desist order without admitting wrongdoing.
- The charges relate to DCG and Genesis' response to the collapse of crypto hedge fund Three Arrows Capital in 2022.
- Regulators accused DCG and Genesis of misleading investors about financial conditions by falsely claiming losses were absorbed by DCG.
- DCG issued a promissory note to Genesis to create an appearance of liquidity, which it denies was a sham.
- Ongoing investigations by the SEC and DOJ began in 2023; NY Attorney General Letitia James seeks $3 billion in additional penalties from DCG.
The SEC stated that transparency regarding financial situations is crucial, highlighting that DCG and Moro did not meet this standard.