Cryptocurrency venture capital giant Digital Currency Group (DCG), which is helmed by "crypto king" Barry Silbert, has been charged by the U.S. Securities and Exchange Commission (SEC) has been charged for misleading investors, according to a Friday filing .
DCG will have to pay a $38 million civil money penalty to the SEC within the next 14 days as part of its settlement deal with the regulator.
It is worth noting that Silbert himself was not named by the SEC.
The SEC stated that the VC behemoth "negligently engaged in conduct that misled investors" with a lending program offered by Genesis Global Capital (GGC), one of the company's subsidiaries.
GGC has been accused of generating revenue by commingling investors' assets and lending them to institutional borrowers.
After a significant borrower (Three Arrows Capital) defaulted on a margin call, DCG downplayed the severity of this development.
GCG ended up filing for bankruptcy in early 2023 after failing to fulfill redemption requests.
