Crypto company Virtual Foreign money Workforce to pay SEC $38.5 million for deceptive buyers

Virtual Foreign money Workforce, the crypto company based via Barry Silbert, and the previous government of a defunct unit are paying the SEC $38.5 million for deceptive buyers.

In a statement on Friday, the company mentioned that DCG and Soichiro “Michael” Moro, the ex-CEO of crypto lender Genesis International Capital, pays the civil consequences to choose fees for deceptive buyers about Genesis’s monetary status.”

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 will be important that businesses and their officials discuss in truth to the making an investment family, particularly in instances of monetary instability or turmoil,” Sanjay Wadhwa, acting director of the SEC’s Division of Enforcement, said in the statement. “The Fee discovered that DCG and Moro fell scale down in that regard.”

Wadhwa added that DCG and Moro “painted a misleadingly rosy image” instead of being transparent about the the company’s financial troubles.

The incidents date back to June 2022. That’s when crypto hedge fund Three Arrows, a major Genesis borrower, defaulted on a margin call, “which compromised Genesis’s industry,” the SEC said. The agency said that DCG and Moro “downplayed” the impact of the loss in some social media posts that were retweeted by DCG executives.

In an emailed statement, a DCG spokesperson said the company is “happy to have concluded” the investigation.

“DCG has at all times strived to behavior its industry with the best possible integrity, and we consider our movements alike to Genesis had been in line with that method,” the company said. “This agreement lets in us to concentrate on our enlargement tasks and proceed to include the certain momentum within the business.”

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.

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