The cryptocurrency group will pay $38 million to settle SEC charges against the cryptocurrency company's bankrupt lending unit Genesis Global Capital. The JSC accused the company of negligence and deliberately misleading investors about the validity of the failed division. DCG today settled these charges without admitting or denying the charges.

“In mid-June 2022, a large borrower defaulted on a margin call, putting GGC’s business at risk.” SEC filing on Friday He reads. “However, Digital Currency Group negligently engaged in conduct that misleadingly understated the impact of this default and overstated what Digital Currency Group did to assist GGC in the aftermath. In short, Digital Currency Group’s failure to exercise reasonable care created the impression “Materially false to GGC regarding the financial health of GGC.”

The “big borrower” in question is Three Arrows Capital, a once-prominent cryptocurrency hedge fund It catches fire in 2022 middle Terra's cryptocurrency ecosystem collapses. According to a Securities and Exchange Commission filing, bankrupt Three Arrows Capital had $2.4 billion worth of outstanding loans from Genesis, and DCG knew Genesis was poised to lose at least $1 billion from the fund's collapse. However, the SEC said Genesis and DCG continued to act as if their businesses were not threatened by the moves, even though that was not true.

Former Genesis CEO Soichiro "Michael" Morrow will also pay a settlement of $500,000 per... Separate SEC filingFor his role in the matter.

Editor's Note: This story is breaking and will be updated with additional details.