Genesis Global Capital, the crypto lending firm that filed for bankruptcy in 2023, has launched two major lawsuits against its parent company, Digital Currency Group (DCG), and CEO Barry Silbert. The allegations are serious—fraud, reckless mismanagement, and siphoning over $1 billion in assets from Genesis.
At the heart of the case: Genesis’s creditors are still owed over $2.2 billion, and the company now seeks to recover $3.3 billion through legal action.
Let’s break down the two lawsuits.
Filed in Delaware, this lawsuit targets fraud and reckless mismanagement by DCG and CEO Barry Silbert. The filing outlines a series of questionable decisions made to favor DCG and its subsidiaries—especially Grayscale—at the expense of Genesis and its creditors.
The second lawsuit, filed in the New York bankruptcy court, dives deeper into insider withdrawals and mismanagement during market turmoil.
Despite the legal action, it’s the retail and institutional clients who bear the brunt of Genesis’s collapse. With over $14 billion in outstanding loans at the time of its bankruptcy, the scale of the fallout is enormous.Genesis aims to recover $3.3 billion through these lawsuits. The outcome could significantly impact DCG and the broader crypto lending ecosystem.
Genesis Global Capital is a crypto lending firm that provides institutional lending services for digital assets.
Genesis Global Capital filed for Chapter 11 bankruptcy protection on January 19, 2023.
Genesis filed for bankruptcy due to significant losses from market turmoil, including exposure to Terra-Luna, 3AC, and FTX crashes.
Genesis accuses them of fraud, reckless mismanagement, and siphoning over $1 billion, aiming to recover $3.3 billion for creditors.
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