{"id":129603,"date":"2025-05-20T08:15:38","date_gmt":"2025-05-20T08:15:38","guid":{"rendered":"http:\/\/cryptospotters.net\/?p=129603"},"modified":"2025-05-20T08:15:38","modified_gmt":"2025-05-20T08:15:38","slug":"genesis-files-dual-lawsuits-to-claw-back-3-3b-from-dcg-barry-silbert","status":"publish","type":"post","link":"http:\/\/cryptospotters.net\/?p=129603","title":{"rendered":"Genesis files dual lawsuits to claw back $3.3B from DCG, Barry Silbert"},"content":{"rendered":"

Source: Cointelegraph.com NewsGenesis has launched a pair of lawsuits against its parent company, Digital Currency Group (DCG), and its CEO, Barry Silbert, accusing them of fraud, reckless mismanagement, and siphoning more than a billion dollars in value from the now-bankrupt crypto lender.
\nOn May 19, the Delaware Court of Chancery unsealed a complaint detailing how DCG allegedly used Genesis as a corporate ATM, draining funds through self-serving loans and concealed transfers while presenting a false image of financial health.
\nThrough their court-appointed Litigation Oversight Committee (LOC), Genesis creditors claim that over a million digital coins \u2014 worth approximately $2.1 billion \u2014 were funneled away, even as Genesis edged toward collapse.
\nAs per the complaint, Genesis creditors are still owed approximately $2.2 billion worth of crypto assets, including 19,086 Bitcoin (BTC), 69,197 Ether (ETH), and over 17.1 million other tokens, along with significant unpaid fees and interest as of Feb. 9, 2025.
\nAt the core of the lawsuit is the claim that Silbert and other insiders ignored basic risk controls and pushed Genesis into reckless lending practices that ultimately served to benefit DCG\u2019s crown jewel, Grayscale Investments.
\nDCG withdrew $1.2 billion from Genesis before bankruptcy
\nThe complaint describes Genesis as having operated without a board or independent oversight, with key decisions made to enrich DCG at the expense of depositors.
\n\u201cIn particular, Silbert, Kraines, and Murphy orchestrated sham transactions at the end of the second and third quarters of 2022, when Genesis\u2019s books closed, to deceive Genesis lenders into believing that DCG was providing liquidity and equity to Genesis,\u201d the complaint states.
\nGenesis also said it was forced to accept illiquid Grayscale Bitcoin Trust (GBTC) shares as collateral and was barred from selling them, creating major valuation risks.
\n\u201cGBTC was illiquid because it could not be sold for six months after its purchase due to a lockup period imposed by the SEC, and DCG prohibited Genesis from re-selling GBTC even after the lockup period ended,\u201d the complaint states.
\nThe complaint names DCG, Barry Silbert, former Genesis CEO Michael Moro, former DCG CFO Michael Kraines, DCG President Mark Murphy and DCG\u2019s investment banker Ducera Partners as defendants.
\nSource: GenesisLOCRelated: Bankrupt crypto firm Genesis completes restructuring
\nA second complaint, filed in the US Bankruptcy Court for the Southern District of New York, alleges that DCG and its affiliates withdrew over $1.2 billion in US dollars and cryptocurrencies during the year leading up to Genesis\u2019s bankruptcy.
\nThese withdrawals, the LOC argues, were timed around major market events such as the collapses of Terra-Luna, Three Arrows Capital, and FTX \u2014 moments when Genesis was already insolvent.
\nInternal filings suggest insiders recovered 100% of their funds, while retail and institutional creditors were left exposed.
\nGenesis seeks to recover billions
\nIn total, Genesis is seeking to recover more than $3.3 billion through the two separate lawsuits.
\nIn April 2025, a New York judge ruled that most of the New York Attorney General\u2019s civil fraud lawsuit against DCG, Silbert, and former Genesis CEO Michael Moro can move forward.
\nThe suit accuses DCG and its bankrupt lending arm Genesis of misleading investors after the collapse of crypto hedge fund Three Arrows Capital, allegedly masking a $1 billion shortfall with a 10-year, low-interest promissory note.
\nWhile Gemini and Genesis have settled, DCG and the executives have fought the charges, arguing they didn\u2019t sell securities.
\nGenesis filed for bankruptcy in early 2023 with $14 billion in outstanding loans.
\nMagazine: Father-son team lists Africa\u2019s XRP Healthcare on Canadian stock exchangeRead More<\/a><\/p>","protected":false},"excerpt":{"rendered":"

Source: Cointelegraph.com NewsGenesis has launched a pair of lawsuits against its parent company, Digital Currency Group (DCG), and its CEO, Barry Silbert, accusing them of fraud, reckless mismanagement, and siphoning… <\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[5],"tags":[],"_links":{"self":[{"href":"http:\/\/cryptospotters.net\/index.php?rest_route=\/wp\/v2\/posts\/129603"}],"collection":[{"href":"http:\/\/cryptospotters.net\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/cryptospotters.net\/index.php?rest_route=\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"http:\/\/cryptospotters.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=129603"}],"version-history":[{"count":0,"href":"http:\/\/cryptospotters.net\/index.php?rest_route=\/wp\/v2\/posts\/129603\/revisions"}],"wp:attachment":[{"href":"http:\/\/cryptospotters.net\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=129603"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/cryptospotters.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=129603"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/cryptospotters.net\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=129603"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}