(Bloomberg) -- A bitter feud between crypto tycoons has piqued the interest of US investigators who were already looking into the finances of one of the industry’s best-known empires.

For months, Digital Currency Group Inc. and its chief executive officer Barry Silbert have been facing fraud accusations from Cameron Winklevoss, the co-founder of crypto trading platform Gemini Trust Co. Despite them denying the claims, federal officials are digging in as part of an ongoing review of the internal financial dealings of DCG and its Genesis Global Capital subsidiary. 

Prosecutors in Brooklyn, Federal Bureau of Investigation agents, and US Securities and Exchange Commission staff sat in on an interview in recent months with Winklevoss to discuss his allegations, according to people familiar with the matter. The U.S. Attorney’s Office for the Eastern District of New York inquired specifically about Silbert’s conduct, said the people, who asked not to be identified discussing the confidential probe. 

Silbert, who hasn’t been accused of any wrongdoing, referred an inquiry to a DCG spokeswoman. The representative for the company, which authorities also haven’t accused of misconduct, declined to comment. In the past, the company has said it operates in a lawful and ethical manner.  

Investigations by US attorneys, the FBI or the SEC don’t always lead to charges or enforcement actions. All three declined to comment. Winklevoss didn’t respond to requests for comment, while an attorney for him declined to do so.

Read More: Crypto Empire DCG Faces US Investigation Over Internal Transfers

The mounting US scrutiny shows how last year’s crypto market tumult continues to cast a shadow over what were once some of the industry’s brightest areas. 

Gemini Earn

Genesis Global Capital, a now insolvent crypto lending subsidiary of DCG, and Winklevoss’s Gemini collaborated on a program marketed as Gemini Earn. It let Gemini clients collect as much as 8% in interest on their digital-asset holdings. 

The arrangement was successful for both firms until Three Arrows Capital, a crypto investment fund, failed in middle of 2022 — leaving a hole in Genesis’s balance sheet. FTX’s collapse in November sent more shockwaves through the industry. 

Read More: Silbert Wanted to Be Crypto’s Rockefeller. Now He’s Under Siege

Faced with a spike in requests, Genesis froze withdrawals in late 2022, and then filed for bankruptcy in January. Earlier that month, the SEC sued Gemini and Genesis, alleging they offered unregistered securities through the Earn program. Genesis and Gemini, which was founded by Cameron Winklevoss and his twin brother Tyler, are fighting the case. 

As Genesis’s liquidity crisis unfolded, Winklevoss said that DCG and Silbert misled creditors, Earn customers and Gemini. DCG implied it had absorbed Genesis’s losses, when in reality it had entered into a “bogus long-dated promissory note,” Winklevoss wrote in an open letter posted on social media platform X, formerly known as Twitter, in July. 

US law enforcement officials are homing in on the $1.1 billion promissory note that DCG issued to Genesis in the aftermath of the Three Arrows failure, and what Silbert told investors and others about the arrangement, according to the people familiar with the US probe. Federal prosecutors and regulators have talked to former and current Genesis executives, including former CEO Michael Moro, said one of the people. An attorney for Moro declined to comment. 

New York Attorney General Letitia James’s office has also sought interviews with former and current Genesis executives in recent months as part of its own investigation into DCG.

Promissory Note

DCG has said it “fully intends to address its obligations to Genesis Capital.” The promissory note is due in 2032. 

In addition to Genesis, DCG controls digital-asset manager Grayscale Investments, which helms a multibillion-dollar Bitcoin trust. Grayscale last month scored a key legal victory in its push to launch a spot Bitcoin exchange-traded fund.  

Read More: Genesis Creditors Split on $1.4 Billion Repayment Proposal

The tension between Winklevoss and Silbert has been on display during the bankruptcy proceedings for Genesis, which is trying to work out a restructuring deal to pay back the debts it owes to creditors. 

Gemini has refused to get on board with a tentative agreement that would give unsecured creditors a recovery of as much as 90%, according to court papers. Winklevoss’s firm said in a court filing last week that the proposed deal “is woefully light on specifics and remains subject to definitive documentation.” 

In another wrinkle, Genesis sued parent company DCG on Wednesday to recover about $620 million in outstanding loans in a New York bankruptcy court. 

DCG and Silbert are also asking a judge to dismiss a lawsuit by Winklevoss’s company alleging fraud. They’ve said the allegations are an attempt by Gemini, which promoted the Earn program, to deflect blame through a “character assassination campaign” against DCG and Silbert. 

--With assistance from Olga Kharif and Patricia Hurtado.

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