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Home News Crypto

Genesis Sues Parent Company DCG, CEO Barry Silbert Over $1 Billion in Alleged Fraudulent Transfers

20 May 2025
in Crypto, News
Reading Time: 3 mins read
103 6
source:  cryptotimes.io

source: cryptotimes.io

Crypto lending firm Genesis Global Capital has filed two major lawsuits against its parent company, Digital Currency Group (DCG), and CEO Barry Silbert, accusing them of fraudulent transactions and financial misconduct that allegedly drained over $1 billion from Genesis while it was insolvent.

According to a May 20 report by Bloomberg Law, one suit in Delaware Chancery Court and another in the U.S. Bankruptcy Court for the Southern District of New York paint a damning picture of DCG’s actions during Genesis’ financial crisis. The Delaware complaint, partially redacted, accuses DCG, its affiliates—including Grayscale Investments—and key insiders of orchestrating a scheme involving “self-dealing, fraud, and mismanagement.”

Source: Bloomberg Law

Genesis claims these parties misled the market and creditors through reckless loans and deceptive financial reporting while enriching themselves at the expense of Genesis’ clients.

The bankruptcy filing aims to claw back over $1 billion in transfers made during the year leading up to Genesis’ Chapter 11 filing in January 2023. These include $448 million to DCG, $136 million to DCG International, $101 million to HQ Enhanced Yield Fund, and an additional $34 million in alleged fraudulent tax payments. 

The firm claims these outflows occurred during the crypto market’s 2022 meltdown, triggered by the collapse of Terra-Luna, Three Arrows Capital, and FTX, when the firm was already deeply insolvent and burdened with $14 billion in unpaid loans. It also alleges that executives at DCG were fully aware of the lender’s financial distress but chose to shield their interests by funnelling assets internally rather than protecting creditors and customers.

The lender completed its restructuring in August 2024, distributing roughly $4 billion in cash and crypto to creditors. Despite DCG’s opposition, the court-approved plan included a $2.2 billion payout to Gemini Earn users and allowed uncapped recoveries tied to real-time asset values.

With these twin lawsuits, Genesis seeks accountability from its parent company and leadership while aiming to secure additional recoveries for its remaining creditors.

If you want to read more news articles like this, visit DeFi Planet and follow us on Twitter, LinkedIn, Facebook, Instagram, and CoinMarketCap Community.

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