On January 17, the U.S. Securities and Exchange Commission announced that Digital Currency Group Inc. and the CEO of its defunct subsidiary, Genesis Global Capital LLC, have agreed to pay a total of $38.5 million in civil penalties to settle allegations of misleading investors about Genesis's financial status.
According to the SEC, DCG and Genesis CEO Soichoro Moro understated the consequences of a mid-2022 default by one of their major borrowers, Three Arrow Capital.
The SEC stated that Moro made misleading statements on Twitter, now known as X, depicting Genesis’s financial health as robust, with other executives echoing these statements through retweets.
Both the company and Moro neither admitted nor denied the SEC's findings.
Moro's lawyer expressed that the executive is content to resolve the issue, highlighting Moro's efforts to navigate Genesis through market volatility and provide accurate updates, even after his departure in August 2022.
A spokesperson for DCG expressed satisfaction with the resolution, emphasizing that the SEC's focus was primarily on social media posts by a former Genesis executive, affirming DCG's commitment to conducting business ethically and transparently.