Genesis Slams DCG and Barry Silbert with $3.3B Fraud Lawsuit—Crypto’s ’Trustless’ System Strikes Again
Another day, another billion-dollar crypto courtroom drama. Genesis Capital just dropped a legal nuke on Digital Currency Group (DCG) and its CEO Barry Silbert—accusing them of running a ’fraudulent scheme’ that allegedly bilked investors out of $3.3 billion.
Who needs Hollywood when crypto’s backroom deals provide this much theater?
The lawsuit claims DCG engaged in ’systematic deception’—because nothing says ’decentralized ethos’ like old-fashioned financial shell games. Silbert, ever the crypto statesman, reportedly called the claims ’baseless’ while presumably checking his offshore accounts.
This comes as Genesis—DCG’s bankrupt lending arm—tries to claw back funds from what looks increasingly like a pyramid of intercompany IOUs. Pro tip: When your ’innovative financial infrastructure’ relies on suing your parent company, maybe rethink the business model.
Bonus jab: At least traditional banks wait until after the bailout to start the lawsuits.
Genesis Alleges Massive Fund Transfers
At the Core of the legal battle are billions in allegedly fraudulent transfers. According to Genesis, over $2. billion in crypto assets were moved out before bankruptcy, including Bitcoin, Ether, and other tokens. Another $1. billion in cash and crypto was allegedly pulled by DCG and insiders in the year leading up to Genesis’s collapse. These moves, the lawsuits claim, were timed to benefit insiders just as Genesis teetered on the edge. Meanwhile, regular users were left holding the bag.
Barry Silbert Accused of Deception
The lawsuits don’t just go after the company — they name names. Barry Silbert, former Genesis CEO Michael Moro, and other DCG executives are accused of orchestrating “sham transactions” and misleading lenders. Genesis says it was made to accept illiquid Grayscale Bitcoin Trust shares as collateral — and was barred from selling them. These risky moves allegedly benefited Grayscale, another DCG business, while harming Genesis. The filings also claim Genesis had no independent board to stop the bleeding.
Genesis Bankruptcy Fallout
Genesis suspended withdrawals in November 2022 and filed for bankruptcy in early 2023 with over $14 billion in loans. The collapse followed crypto’s rough year, marked by the crashes of Terra-Luna, Three Arrows Capital, and FTX. While the public lost billions, insiders reportedly recovered their funds in full. Genesis has since restructured and started returning assets to creditors, but roughly $2. billion is still owed. These lawsuits aim to close that gap.
DCG and Barry Silbert Deny Claims
DCG has pushed back hard, calling the lawsuits “baseless” and “spurious.” A company spokesperson said the claims recycle old allegations and are part of an opportunistic strategy by large investors. DCG insists it tried to resolve Genesis’s problems in good faith and plans to defend itself aggressively in court. But with mounting evidence and court approval for other fraud cases to proceed, Silbert and DCG may be in for a long legal fight.
