According to a Bloomberg report, U.S. authorities are conducting an investigation into the cryptocurrency conglomerate Digital Currency Group (DCG). The Department of Justice’s Eastern District of New York (EDNY) and the Securities and Exchange Commission (SEC) are both looking into internal transfers between DCG’s lending subsidiary and the firm itself.
The SEC and EDNY have not given any details regarding their inquiry, and DCG has not been accused of any wrongdoing. A spokesperson for the company said that they were not aware of any investigation.
“DCG has always been committed to operating in a legal manner and has nothing to hide. We have no knowledge of the EDNY’s inquiry into our business.”
This news comes after the collapse of crypto trading platform FTX in November, which caused a ripple effect of investigations into other companies. One of the companies impacted by the fall-out was DCG’s lending subsidiary Genesis Global Capital, which disclosed that they had $175 million locked up in an FTX trading account on Nov. 10. Over the past few weeks, Genesis has been working with Moelis & Company to restructure their finances in order to pay back their $900 million debt to the Gemini cryptocurrency exchange.
DCG also owns the news outlet CoinDesk, the bitcoin mining company Foundry, the Luno cryptocurrency exchange and Grayscale Investments. Cointelegraph reported that Grayscale trusts were trading significantly lower than the market price, with Ethereum Classic Trust seeing the biggest discount at 77% on Jan. 4. Litecoin Trust and Bitcoin Cash Trust were both trading at a 65% and 57% discount, respectively.
