Genesis Global Trading, A Defunct Subsidiary of Digital Currency Group, Was Ordered On Friday To Comply With An SEC Subpoena After Failing To Meet The Original October 9th Deadline. Genesis’ Records Are Part Of The SEC’s Multi-Billion Dollar Fraud Investigation of Terraform Labs.
FOR IMMEDIATE RELEASE
Contact: Henry Burke, Burke@therevolvingdoorproject.org
Revolving Door Project Executive Director Jeff Hauser released the following statement in response to Southern District of New York Judge Jed Rakoff’s court order demanding Genesis Global Trading comply with the SEC subpoena:
“While headlines may read that the now-bankrupt Genesis Global Trading was the entity refusing to comply with the SEC subpoena, Genesis was a subsidiary of Digital Currency Group (DCG), and its actions are in line with DCG’s long history of sketchy—possibly illegal— business practices,” said Hauser.
“DCG reportedly colluded with the now defunct Three Arrows Capital (TAC) to “exploit the price of GBTC [Grayscale Bitcoin Trust]” and lent $1.2 billion to TAC, which in return lent $500 million to Terraform Labs – the company under investigation by the SEC in this case. But DCG’s connections to bankrupt (and potentially fraudulent) cryptocurrency firms are not the company’s only suspicious activity.” continued Hauser. “As of January of this year, the Securities and Exchange Commission charged Genesis with the “Unregistered Offer and Sale of Crypto Asset Securities through the Gemini Earn Lending Program” while the DOJ and New York State Attorney General are both continuing to investigate DCG. It was also reported last month that the FBI was investigating claims that DCG CEO Barry Silbert misrepresented the financial condition of his company’s subsidiary, Genesis, before it went bankrupt.”
“It is crucial to note that respected figures like Larry Summers—a former cabinet secretary, advisor to two presidents, and widely cited academic at one of America’s most prestigious universities—have been crucial to the success and proliferation of companies like DCG. Summers was a Senior Advisor to DCG and a member of DCG’s Advisory Board for more than six years, during which many of the company’s ill-fated decisions were made. Summers only publicly distanced himself from the company after the SEC’s suit against the company was made public, and then attempted to paper over his role with the company by scrubbing mention of it from his website. This behavior should be unacceptable for an academic, for a media figure, and for someone who has made himself an unavoidable fixture in economic policy discussions. Last week’s court order is an important reminder that while Summers may have left DCG, the company has continued to engage in sketchy practices, and is able to do so in no small part due to the legitimacy it built by having people like him on the payroll.” finished Hauser.