Whispers about Digital Currency Group’s troubles have continued to make rounds on Twitter this week. While it’s hard to separate fact from fiction, it is worth considering the implications of three possible scenarios.

Scenario #1: Genesis gave clients “phony financial statements”

According to Andrew Parish who related quotes from the DCG/Genesis creditors’ meeting, employees at DCG’s embattled lending subsidiary Genesis are now claiming that they were instructed to convey phony financial statements to clients. They also reportedly said that rumors of any meaningful progress towards solving its liquidity issues are untrue.

If this is indeed the case, then the U.S. Securities and Exchange Commission will likely be looking at investigation into DCG that expands beyond the scope of an unregistered securities offering that it is currently pursuing.

Scenario #2: Genesis is actually insolvent

Ever since it halted withdrawals on Nov. 16, Genesis has been struggling to raise a fresh round of capital and has seemingly had no takers so far – a concerning fact, seeing as the firm is one of the largest market makers in crypto today. Then again, so was Alameda Research.

DCG CEO Barry Silbert has maintained that Genesis’s liquidity issues stemmed from a duration mismatch on its loan orderbook. 

The problem? The wider crypto market doesn’t appear to be convinced.

In fact, Genesis claims are selling for 23% of their face value. Claims are the money owed to a creditor whose assets are locked on the platform; a creditor can sell his or her right to those assets to another party in order to receive immediate liquidity.

Scenario #3: Losses from 3AC’s collapse created a black hole on DCG’s balance sheet

Earlier this month, 3AC founder Su Zhu alleged that Genesis and FTX were actually co-conspirators in taking down LUNA, which ultimately led to the collapse of 3AC. While Zhu’s statements can be largely disregarded as conjecture, a more concerning scenario is exactly how bad Genesis was hit after 3AC’s collapse.

Instead of restructuring, DCG allegedly concealed the true nature of the firm’s losses with a promissory note which Zhu claims “magically filled the hole” in its balance sheet. Zhu is presumably referring to the $1.1 billion long-term promissory note owed to Genesis in 2032.

The questions that remain are: What are the terms of this promissory note? Will they be viewed as “arms’ length” — meaning were the terms set as if DCG and Genesis were unrelated, independent parties? If Genesis goes under, will it take DCG with it? 

Intercompany loans at DCG are currently being scrutinized by the SEC, Bloomberg reported earlier this month.