Genesis continues DCG and Barry Silbert to recover billions for an alleged fault

The Crypto Genesis Global Crypto loan platform launched a legal offensive against its parent company, Digital Currency Group (DCG), and CEO Barry Silbert, accusing engineering a series of initiate transactions that finally led the company to go bankrupt.

In a complaint filed before the Court of Chancellery of Delaware, Genesis said that Silbert and his associates of “recklessly, exploited, then bankrupt” the lender crypto by self-furer and deceptive financial disclosure, according to an announcement on Monday.

The trial alleys that Silbert distorted the financial health of Genesis to enrich himself, DCG and investments in gray levels. Although gray levels are referenced, he is not appointed defendant.

Genesis is looking for $ 2.2

Genesis seeks to recover at least $ 2.2 billion in Bitcoin, Ethereum and other cryptographic assets through the pursuit of Delaware, in order to redistribute the funds recovered from creditors awaiting payment.

A second trial, filed with the American bankruptcy court of the South New York district, focuses on more than a billion dollars in allegedly fraudulent Fiat and crypto transfers.

These transactions include eight transfers totaling around $ 450 million to DCG, as well as more than $ 297 million in crypto sent to DCG International.

Additional $ 34 million was paid to DCG in what Genesis now claims to be tax -related payments.

According to legal deposits, these transfers took place because Genesis faced a stress of serious liquidity triggered by the collapse in 2022 of Terra-Luna and the wider slowdown in the market.

However, deposits also reveal that genesis was already insolvent by the end of 2021, overwhelmed by $ 14 billion in circulation loans.

“Genesis was faced with an extraordinary systemic risk and had practically no internal control to mitigate this risk,” said New York complaint.

DSG was warned by 2021

The deposit also reveals that the DCG was warned in November 2021 by the consulting firm Oliver Wyman about the financial vulnerabilities of Genesis but did not act.

Genesis’ financial problems started with the collapse of 3ac, which sparked liquidity problems, and worsened with FTX’s implosion later that year.

In January 2023, Genesis filed a request for bankruptcy of Chapter 11, discussing more than $ 3.5 billion in debts to its 50 best creditors, including major names like Gemini and Vaneck.

After the approval of the court, the company finalized its restructuring plan in August 2024 and has since started to make more than $ 4 billion in assets to its creditors.

Earlier this year, Securities and Exchange Commission (SEC) announced implementation measures against DCG and Genesis, citing violations of securities laws.

The SEC accused DCG and Genesis of defrauding investors by false declarations, resulting in sanctions and legal action. DCG agreed to pay the costs by paying a fine of $ 38 million.

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