SEC charges Digital Currency Group for misleading investors
The U.S. Securities and Exchange Commission has charged Digital Currency Group (DCG) and former Genesis CEO Soichoro “Michael” Moro for misleading investors regarding Genesis's financial health after the collapse of Three Arrows Capital (3AC). DCG and Moro will pay a total of $38.5 million in civil penalties, with DCG responsible for $38 million and Moro for $500,000, without admitting to any violations. Genesis filed for Chapter 11 bankruptcy in January 2023 following a default by 3AC. The collapse of 3AC significantly impacted the crypto industry, as it held approximately 10.9 million locked LUNA tokens worth $570 million before losing over 99% of their value. 3AC failed to meet margin calls, leading to asset liquidation ordered by a British Virgin Islands court. Moro had previously assured investors that efforts were made to mitigate losses from 3AC exposure.
