Genesis has filed two lawsuits to claw back over $3. billion from its parent company, Digital Currency Group (DCG), and DCG’s CEO, Barry Silbert. The crypto lender accuses DCG and its top brass of fraud, insider dealings, and reckless mismanagement. Genesis claims it was drained of assets and forced into bankruptcy while insiders cashed out. These lawsuits paint a picture of a firm exploited by its own parent company. Now, creditors want their money back.
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.
