Genesis Takes Legal Action Against Parent Company and CEO
Crypto lender Genesis Global Capital has initiated legal proceedings against its parent company, Digital Currency Group (DCG), and CEO Barry Silbert. The lawsuits aim to recover over $1 billion in funds allegedly transferred improperly during Genesis’ insolvency.
Genesis accuses DCG and insiders of self-dealing, fraud, and mismanagement. They claim these parties funneled funds to themselves via risky lending and false financial reports. The Delaware lawsuit demands the return of 1 million digital assets, valued at about $2.1 billion, to repay creditors.
Genesis alleges that DCG and its affiliates, like Grayscale Investments, benefited at the expense of its customers. The company seeks to claw back these assets to address its financial crisis. The suits, reported by Bloomberg Law,highlight a series of questionable transactions. These actions, Genesis believes, contributed to its downfall. The company seeks to reclaim these assets to help settle debts.
Genesis filed two lawsuits. One is in Delaware, targeting DCG and its subsidiaries. The other is in New York’s bankruptcy court. It targets over $1 billion in transfers made in the year before its January 2023 bankruptcy.
Genesis claims DCG knew about its financial troubles but took no action. Instead, they moved assets internally to shield DCG from the fallout. Genesis filed for Chapter 11 in January 2023 and finished restructuring in August 2024, returning about $4 billion to creditors.
These lawsuits aim to hold DCG accountable for Genesis’ collapse and improve creditor recoveries. They highlight the need for clarity and ethical practices in the crypto industry.
