Genesis Global, once one of the leading crypto lending firms, has filed a pair of lawsuits against its parent company, Digital Currency Group (DCG), and CEO Barry Silbert, accusing them of masterminding a series of self-serving financial moves that led to Genesis’s collapse.
In legal filings submitted to the Delaware Court of Chancery and U.S. Bankruptcy Court in New York, Genesis alleges that Silbert and DCG misused internal financial mechanisms to conceal the company’s distress, funneling funds to DCG and enriching insiders while creditors were left in limbo.
$2.2 Billion in Assets at Stake Amid Insider Dealings
Genesis is pursuing the recovery of at least $2.2 billion in cryptocurrency and fiat assets, citing a pattern of “reckless exploitation” and lack of financial transparency. The lawsuits assert that these insider dealings occurred while Genesis was already insolvent—dating back to late 2021—and included massive transfers of cash and crypto as liquidity dried up.
In particular, the complaints detail:
- Eight transfers totaling approximately $450 million to DCG;
- $297 million in crypto assets sent to DCG International;
- $34 million paid as alleged tax liabilities, which Genesis now disputes as illegitimate.
While Grayscale Investments, another DCG affiliate, is referenced in the filing, it has not been named as a defendant.
Warnings Ignored, Liabilities Mount
Internal documents show that Genesis had more than $14 billion in loans on its books by the end of 2021. Despite receiving risk alerts from consulting firm Oliver Wyman, DCG reportedly made no meaningful efforts to stabilize Genesis.
The crypto lender’s downward spiral accelerated in 2022 following the collapse of Three Arrows Capital (3AC) and FTX, which crippled industry liquidity. Genesis ultimately filed for Chapter 11 bankruptcy in January 2023, listing over $3.5 billion in debts to major counterparties such as Gemini.
Since court approval of its restructuring in August 2024, Genesis has started returning $4 billion in assets to creditors.
SEC Scrutiny Adds to Legal Pressure
The U.S. Securities and Exchange Commission (SEC) has also levied charges against Genesis and DCG, accusing them of defrauding investors and violating securities laws. DCG settled the case for $38 million, but scrutiny continues.
The legal fallout highlights a growing call for accountability and transparency in crypto finance, especially as firms like Genesis and DCG once sat at the heart of the digital asset boom.
As litigation proceeds, the case could become a defining moment for governance standards in the industry.
