Genesis Sues DCG, Seeks Recovery of Over $3.1B in Note and Asset Transfers
Genesis Global has filed two lawsuits against its parent company, Digital Currency Group (DCG), seeking over $3.1 billion for allegedly improper transfers during its financial decline in 2022. The lawsuits claim that DCG, CEO Barry Silbert, and executives engaged in fraudulent transfers and misleading disclosures, leading to Genesis's bankruptcy. A Delaware Chancery Court complaint states that Genesis was recklessly operated and exploited by DCG. The lawsuits allege that Silbert concealed the crisis from lenders while aware of the risks in Genesis's loan book. Genesis seeks recovery of disputed transfers, including a $1.1 billion promissory note and digital assets valued over $2 billion. The Genesis Litigation Oversight Committee supports the lawsuits, claiming misleading information was spread to prevent a bank run. Genesis also filed a federal bankruptcy complaint detailing over $1.2 billion in preferential transfers to DCG and insiders. DCG and former Genesis CEO settled SEC charges for misleading investors about Genesis's financial health. A proposed $2 billion settlement between Genesis and DCG is pending as litigation continues.
