Genesis Slams DCG and Barry Silbert with Billion-Dollar Lawsuit—Crypto’s ’Trustless’ System Shows Its Teeth
Genesis Capital drops the hammer on Digital Currency Group and its CEO Barry Silbert, filing suit to claw back billions in alleged misappropriated funds. The move exposes the crypto industry’s favorite paradox: decentralized ideals meeting old-fashioned legal artillery.
Bankruptcy as a Battlefield
Genesis—already navigating Chapter 11—claims DCG engaged in ’egregious misconduct,’ including shady loan maneuvers and balance-sheet gymnastics. Because nothing says ’financial revolution’ like creative accounting.
Silbert’s Reckoning?
The suit paints Silbert as the architect of a ’fraudulent scheme,’ alleging he personally greenlit transactions that left Genesis holding the bag. Crypto’s golden boy now faces a judge instead of moonboys on Twitter.
The Irony Won’t Be Tokenized
As Genesis deploys lawyers instead of smart contracts to recover funds, the case becomes a brutal reminder: When billions vanish, even crypto maximalists run to the courts they claim to disrupt.
Genesis Seeks $2.2 Billon
Genesis is seeking to recover at least $2.2 billion in Bitcoin, Ethereum, and other crypto assets through the Delaware suit, with the goal of redistributing the recovered funds to creditors still awaiting payment.
A second lawsuit, filed in the U.S. Bankruptcy Court for the Southern District of New York, focuses on over $1 billion in allegedly fraudulent fiat and crypto transfers.
These transactions include eight transfers totaling roughly $450 million to DCG, as well as more than $297 million in crypto assets sent to DCG International.
Another $34 million was paid to DCG in what Genesis now claims were bogus tax-related payments.
It’s gonna be a big week… The Genesis LOC’s two major lawsuits against DCG, Silbert and a network of insiders are now available to the public.
The partially redacted complaint in Delaware Chancery Court alleges Silbert and DCG’s control and exploitation of Genesis, pursuing…
According to court filings, these transfers took place as Genesis was facing severe liquidity stress triggered by the 2022 collapse of Terra-Luna and the broader market downturn.
However, the filings also reveal that Genesis was already insolvent by the end of 2021, burdened by $14 billion in outstanding loans.
“Genesis faced extraordinary systemic risk and had virtually no internal controls to mitigate that risk,” the New York complaint states.
DSG Was Warned by as Early as 2021
The filing further reveals that DCG was warned as early as November 2021 by consulting firm Oliver Wyman about Genesis’s financial vulnerabilities but failed to act.
The financial troubles of Genesis began with the collapse of 3AC, which triggered liquidity issues, and worsened with the implosion of FTX later that year.
In January 2023, Genesis filed for Chapter 11 bankruptcy, disclosing over $3.5 billion in debts to its top 50 creditors, including major names like Gemini and VanEck.
Following court approval, the company finalized its restructuring plan in August 2024 and has since started returning over $4 billion in assets to its creditors.
Earlier this year, the Securities and Exchange Commission (SEC) announced enforcement actions against DCG and Genesis, citing violations of securities laws.
The SEC accused DCG and Genesis of defrauding investors through misrepresentation, resulting in penalties and legal action. DCG agreed to settle the charges by paying a $38 million fine.
