Digital Currency Group, the crypto firm founded by Barry Silbert, and the former executive of a defunct unit are paying the SEC $38.5 million for misleading investors.
In a statement on Friday, the agency said that DCG and Soichiro “Michael” Moro, the ex-CEO of crypto lender Genesis Global Capital, will pay the civil penalties to settle charges for misleading investors about Genesis’s financial condition.”
Genesis, once a business at the heart of DCG, was among the multiple casualties in the industry contagion set off by the collapse of FTX. The firm filed for Chapter 11 bankruptcy protection in January 2023.
“It is vital that companies and their officers speak truthfully to the investing public, especially in times of financial instability or turmoil,” Sanjay Wadhwa, acting director of the SEC’s Division of Enforcement, said in the statement. “The Commission found that DCG and Moro fell short in that regard.”
Wadhwa added that DCG and Moro “painted a misleadingly rosy picture” instead of being transparent about the the company’s financial troubles.
The commission’s statement said DCG and Moro are paying the penalties without admitting or denying the SEC’s findings that they violated the Securities Act of 1933.
DCG didn’t immediately respond to a request for comment.
In May 2024, New York Attorney General Letitia James separately settled with Genesis for $2 billion to repay defrauded investors.
WATCH: Crypto broker Genesis files for Chapter 11 bankruptcy