The founder of X3, Andrew, made some surprising claims against Digital Currency Group (DCG) on X (Twitter) in a shocking turn of events that sent shockwaves across the cryptocurrency community. In Andrew’s tweet, DCG is accused of several dubious behaviors, which raises the possibility of widespread financial mismanagement and conflicting interests within the crypto conglomerate.
DCG Accused Of Knowing Genesis Bankruptcy Beforehand
“Attempting to keep it as simple as possible on DCG stuff,” Andrew’s tweet reads. It goes on to make several devastating allegations, including the fact that DCG acted in a way that appeared to benefit the group itself while being aware of several firms’ earlier bankruptcies.
Andrew asserts that Grayscale’s parent company was privy to the insolvency of 3AC and FTX before anyone else, even going so far as to buy their holdings in Grayscale Bitcoin Trust (GBTC). In addition, he asserts that DCG organized substantial loans from Genesis, a business it controls, despite knowing Genesis was about to go bankrupt. The tweet ends with accusations that DCG engaged in high-risk trading, such as the GBTC “carry trade,” and that it also paid hefty fees to itself.
These accusations follow the filing of two lawsuits by Genesis Global against DCG and Digital Currency Group International (DCGI). Over 600 million dollars in debts, including over $115 million in Bitcoin, are being sought back by Genesis Global. The gravity of the problem was increased, according to Genesis Global, by the fact that these loans, totaling about $620 million, matured in May and contained a significant amount of Bitcoin.
DCG Denies All Allegations
Separately, Reuters has reported that U.S. authorities are now investigating allegations of fraud made by Cameron Winklevoss, co-founder of cryptocurrency firm Gemini Trust Co., against DCG and its founder, Barry Silbert. Winklevoss alleges that DCG and Silbert misrepresented the financial health of Genesis, which filed for bankruptcy earlier this year. Gemini Trust Co. was Genesis’ largest creditor, leading to its legal action against DCG and Silbert.
In response to these allegations and lawsuits, DCG vehemently denies any wrongdoing. A spokesperson for the company declined to comment on the ongoing inquiry but maintained that DCG has consistently conducted its business lawfully and with the highest ethical standards. The company also stated that it cooperates with regulators when called upon.
As these charges and lawsuits continue, the cryptocurrency sector is left discussing issues of transparency, responsibility, and the potential impact on the greater financial landscape.
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