Genesis’ New Lawsuits Target DCG Officials Over Lost Crypto Funds

Genesis Litigation Oversight Committee (LOC), the company responsible for overseeing Genesis’s bankruptcy, has filed two new lawsuits. These legal actions target Genesis’s parent company, Digital Currency Group (DCG), its CEO, Barry Silbert, and other top executives.

The lawsuits claim that billions of dollars were wrongly taken from Genesis before the company went bankrupt in 2023.

Genesis Sues DCG for Funds Mismanagement and Deception

The first lawsuit was filed in Delaware. It says Barry Silbert and his team recklessly ran Genesis. The complaint accuses them of misleading customers about the company’s financial health while taking money for their benefit. 

It also claimed the company’s officials moved money from Genesis to other parts of DCG, even when they knew the company was in trouble. Although Grayscale Investments, another company owned by DCG, was mentioned in the complaint, it was not named as a defendant.

In this lawsuit, Genesis asks the court to help recover at least $2.2 billion in Bitcoin (BTC), Ethereum (ETH), and other crypto assets. These funds would then be returned to the creditors still waiting to be paid.

This class action comes after the U.S. Securities and Exchange Commission (SEC) charged DCG and former Genesis CEO Michael Moro. In January, the agency claimed the company misled investors, with the case ending with a $38.5 million settlement.

DCG Accused of Moving $1B From Genesis Before Collapse

Another lawsuit was filed in New York’s Bankruptcy Court. It claimed that DCG and its insiders moved over $1 billion in cash and crypto out of Genesis while the company collided. The suit says these transfers took place when Genesis was already facing serious financial risks, especially after the crash of Terra-Luna.

It also revealed that the firm had $14 billion in loans and was already insolvent by the end of 2021. According to the filing, a financial consulting firm warned DCG about these risks in November 2021, but no action was taken to fix the problems.

Genesis filed for bankruptcy in January 2023. At that time, it owed money to over 100,000 people and businesses, with total debts reaching as high as $10 billion. The company completed its restructuring process in August 2024 and has since started returning money to creditors. So far, Genesis has paid back more than $4 billion in assets.

DCG Responds to the Lawsuits

DCG has denied all the claims. A company spokesperson said the lawsuits are not new and that the accusations have been made before. 

It was also revealed that DCG worked with many people during the bankruptcy process to find a fair solution. The company says it will strongly defend itself against unfair and false accusations.

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