DCG and Barry Silbert Hit with Fresh Lawsuits—Genesis Escalates Legal Onslaught

Digital Currency Group and its CEO Barry Silbert are back in the crosshairs—Genesis Capital just filed new lawsuits alleging shady financial maneuvers. The crypto giant’s legal team must be billing overtime.

Here’s the kicker: The complaints target DCG’s alleged shell-game accounting—moving funds between subsidiaries like a decentralized Ponzi scheme. Because nothing says ’trust us’ like obfuscated balance sheets.

Silbert’s playbook? Delay, distract, and hope regulators get bored. But with billions at stake and creditors getting restless, this legal drama won’t end with a quiet settlement. Buckle up—Discovery phase is going to be a bloodsport.

Bonus jab: If only Wall Street had a monopoly on creative accounting—oh wait, they do. Crypto just added blockchain receipts.

TLDR

• Genesis has filed two new lawsuits against its parent company, DCG, and CEO Barry Silbert.
• The lawsuits aim to recover billions in crypto and fiat assets allegedly taken from Genesis.
• One case was filed in Delaware, which accused DCG of reckless conduct and fraud.
• The Delaware lawsuit seeks to reclaim at least $2.2 billion for Genesis creditors.
• A second lawsuit filed in New York alleges over $1 billion in fraudulent transfers.

Genesis is back in court, as its Litigation Oversight Committee filed two major lawsuits against parent company DCG and top executives. The legal actions seek to recover billions in crypto and fiat assets allegedly misused during Genesis’s financial crisis. These lawsuits come after the crypto lender’s Chapter 11 bankruptcy and aim to maximize recovery for over 100,000 creditors.

Bitcoin Transfers to DCG and Executives Targeted in Delaware Lawsuit

The Delaware Court of Chancery received a complaint accusing Barry Silbert and DCG of reckless management of Genesis. The lawsuit alleges they operated Genesis self-interestedly, transferring assets under pretenses while ignoring major financial risks. Genesis LOC is pursuing at least $2.2 billion in bitcoin, ether, and other digital assets through this case.

Court filings claim Silbert and affiliates misrepresented Genesis’s stability to clients while funneling funds to DCG and other entities. They reportedly failed to address early warnings about systemic risks identified by external advisors in late 2021. Genesis LOC contends that these actions directly contributed to the lender’s eventual collapse.

Although Grayscale Investments was mentioned in connection to the asset transfers, it was not listed as a defendant in the suit. Genesis LOC maintains the named parties acted knowingly and intentionally to enrich themselves at the expense of creditors. The filing insists that executives prioritized internal profits during critical moments of market volatility.

Genesis Alleges $1 Billion in Hidden Transfers

A separate lawsuit filed in the Southern District of New York targets more than $1 billion in transfers from Genesis. The complaint outlines how DCG, Silbert, and associates moved hundreds of millions in assets as Genesis faced financial instability. These included crypto transfers to DCG International and questionable tax-related payments.

The lawsuit states DCG received $450 million across eight transactions, while another $297 million in crypto was sent to a DCG affiliate. According to the court documents, Genesis also made $34 million in disputed payments under the guise of tax obligations. These transfers allegedly occurred during a critical liquidity crisis caused by the broader crypto downturn.

Genesis LOC argues that internal warnings were ignored, especially after the collapse of the Terra-Luna ecosystem heightened market risks. By late 2021, Genesis was already insolvent, with $14 billion in outstanding loans. Despite warnings from advisors like Oliver Wyman, the company’s leadership failed to implement corrective measures.

Genesis Creditors Seek Accountability and Maximum Recovery

Genesis filed for bankruptcy in January 2023, listing over $10 billion in liabilities and more than 100,000 creditors. After completing its restructuring plan, the firm began distributing over $4 billion in assets last August. Genesis LOC continues to pursue legal action to recover remaining funds for creditor distribution.

Both lawsuits underscore efforts to hold DCG and top executives accountable for their roles during Genesis’s financial collapse. The filings argue that misconduct and fraudulent transfers reduced the lender’s asset base and damaged creditor interests. Genesis LOC emphasizes that these new cases are critical to recoup billions in losses.