Genesis files dual lawsuits to claw back $3.3B from DCG, Barry Silbert

Genesis, the bankrupt crypto lender, has filed a pair of lawsuits against its parent company, Digital Currency Group (DCG), and CEO Barry Silbert, alleging fraud, reckless mismanagement, and the misappropriation of over $1 billion. A Delaware Court of Chancery complaint reveals how DCG allegedly treated Genesis as a personal financial resource, siphoning funds through questionable loans and concealed transfers while publicly maintaining a facade of financial stability.

Genesis creditors, represented by their Litigation Oversight Committee (LOC), claim that over $2.1 billion in digital assets—including a million coins—were diverted even as the company teetered toward collapse. Creditors are still owed approximately $2.2 billion, encompassing significant crypto holdings (Bitcoin, Ether, and other tokens), unpaid fees, and interest.

The lawsuits center on accusations that Silbert and other insiders disregarded crucial risk management protocols and steered Genesis into risky lending practices that primarily benefited DCG’s flagship investment arm, Grayscale Investments. A key allegation points to DCG withdrawing $1.2 billion from Genesis prior to its bankruptcy filing. The complaint underscores Genesis’s alleged lack of independent oversight, with key decisions favoring DCG at the expense of depositors. The complaint details manipulative transactions designed to deceive lenders regarding DCG’s financial support for Genesis.

Further complicating matters, Genesis was allegedly forced to accept illiquid Grayscale Bitcoin Trust (GBTC) shares as collateral, barred from selling them even after lockup periods expired, creating substantial valuation risks. The defendants in the lawsuits include DCG, Barry Silbert, former Genesis CEO Michael Moro, former DCG CFO Michael Kraines, DCG President Mark Murphy, and DCG’s investment banker, Ducera Partners.

A separate lawsuit filed in New York alleges that DCG and affiliates withdrew over $1.2 billion in fiat and cryptocurrencies in the year preceding Genesis’s bankruptcy, coinciding with major market downturns. This allegedly resulted in insiders recovering all their funds while leaving retail and institutional creditors with substantial losses. Genesis seeks to recover over $3.3 billion through these legal actions. In April 2025, a New York judge allowed most of the New York Attorney General’s civil fraud lawsuit against DCG, Silbert, and Moro to proceed, further escalating the legal challenges facing the company.