DCG says it ‘cooperated for months’ with NYAG prior to lawsuit

In its third quarter shareholder letter, DCG gave updates on Grayscale, the NYAG suit and the Genesis creditor plan

article-image

T. Schneider/Shutterstock modified by Blockworks

share

Digital Currency Group said it “cooperated for months” with the New York Attorney General in its investigation prior to the lawsuit last week. 

“We were blindsided by the filing of the complaint, and there is no evidence of any wrongdoing by DCG, [CEO] Barry Silbert, or our employees, nor are there any compelling factual allegations in the complaint to establish the AG’s conclusory assertions regarding DCG,” the letter shared with Blockworks said.  

DCG said it engaged with the investigation in an “open and transparent matter,” prior to the suit. “There are no new material allegations in the complaint about DCG; this is largely a regurgitation of previously raised issues.”

The NYAG alleged that “the Genesis Entities, [Michael] Moro, DCG, and [Barry] Silbert disguised $1.1 billion in losses through a months-long campaign of misstatements, omissions and concealment.” NYAG Letitia James also claimed that Gemini Earn constitutes an investment contract under the Howey test.

Outside of the lawsuit, DCG touched on the agreement in principle it reached with Genesis Creditors back in August. 

“We are pleased to report that DCG has already made ~$225 million in payments to Genesis in USD and BTC. These payments, in addition to the full early repayment of the $350 million secured term loan to Eldridge in March, brings us to ~$575 million of debt repaid since the end of 2022,” the letter said.

The company says that it’s “confident” that it can repay the remaining $50 million to Genesis

DCG, as previously reported, sees roughly 70-90% recovery for creditors in the Genesis bankruptcy, with recovery between 95-110% for Gemini Earn claims. The company “remains committed to reaching a fair outcome for all parties.”

Gemini, however, has previously pushed back against DCG’s recovery claims, alleging the company of “gaslighting” creditors. Gemini and DCG are locked in a lawsuit and were both named in the NYAG’s suit. 

As for the Grayscale updates, the company touched on the court win for Grayscale, which saw a panel of judges side with the company. Per the court, the US Securities and Exchange Commission will take the application to convert GBTC to an ETF back under consideration.

“The Grayscale team remains operationally ready to convert GBTC to an ETF upon the SEC’s approval, and the Grayscale team will share more information about potential next steps as soon as practicable,” the letter said.


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the Forward Guidance newsletter.

Get alpha directly in your inbox with the 0xResearch newsletter — market highlights, charts, degen trade ideas, governance updates, and more.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 18 - 20, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

kamino cover.jpg

Research

Kamino has solidified its position as the leading money market on Solana and is emerging as a DeFi bluechip. Although DeFi competition is fierce, Kamino has kept iterating on its product to provide the best-in-class UX, paired with a robust risk management framework and battle-tested infrastructure. Given the rollout of Kamino Lend V2, the protocol may scale aggressively over the coming months, penetrating previously untapped markets in Solana DeFi.

article-image

OpenSea co-founder Devin Finzer claims the new OpenSea is being rebuilt “from the ground up”

article-image

A pilot project from Swift, UBS and Chainlink demonstrates how tokenized funds can bridge traditional and crypto rails

article-image

Predictions that the US election will fuel bitcoin’s price are set to be tested

article-image

A tumultuous presidential campaign comes to an end

article-image

Republican challenger Bernie Moreno captured the industry’s attention when he went up against a key member of the so-called “anti-crypto army”

article-image

Swan Bitcoin managing director John Haar is among those expecting that the election may only have a short-term impact on crypto markets