SEC Charges Digital Currency Group and Soichiro “Michael” Moro, Former CEO of Genesis Global Capital, for Misleading Investors about Genesis’s Financial Condition

The Securities and Exchange Commission today announced that Digital Currency Group Inc. (DCG), and Soichoro “Michael” Moro, the former CEO of DCG’s now-defunct subsidiary, Genesis Global Capital LLC, will pay a combined $38.5 million in civil penalties to settle charges for misleading investors about Genesis’s financial condition. According to the SEC’s order, in mid-June 2022, Three Arrows Capital, a crypto asset hedge fund and one of Genesis’s largest borrowers, defaulted on a margin call, which compromised Genesis’s business. DCG and Moro, however, downplayed the impact of the approximately $1 billion loss and exaggerated what DCG did to help Genesis in the aftermath.