The SEC has charged Digital Currency Group (DCG) and former Genesis CEO Michael Moro with misleading investors about Genesis’s financial health, leading to a $38.5 million settlement.
In June 2022, Genesis Global Capital, a DCG subsidiary, suffered a significant loss when Three Arrows Capital defaulted on a margin call. DCG and Moro downplayed the impact and overstated their efforts to assist Genesis, including misleading statements on social media. The SEC found that these actions misled investors about Genesis’s true financial condition.
“This case underscores the SEC’s commitment to enforcing transparency in the crypto industry,” said Sanjay Wadhwa, Acting Director of the SEC’s Division of Enforcement. “Companies must provide truthful information, especially during financial instability.”
This settlement highlights the increasing regulatory scrutiny on crypto firms. Companies must prioritize compliance and transparency to avoid legal repercussions. The SEC’s actions signal a shift towards stricter enforcement in the cryptocurrency sector.
