In short
- Genesis has submitted two lawsuits that accuse DCG and important managers of orchestrating fraudulent transfers and misleading creditors when approaching the collapse.
- The complaints accuse DCG of the use of Genesis as an “alter ego” of the company to enrich affiliated companies and to hide increasing losses from creditors.
- The lawsuits are looking for more than $ 3.1 billion, including a promotion of $ 1.1 billion and more than $ 1.2 billion in alleged incorrect transfers, some of which are made in crypto assets with a value of a maximum of $ 2.1 billion.
Genesis Global has submitted two new lawsuits against her parent company, Digital Currency Group, with the aim of reclaiming billions of dollars that, according to them, was wrongly transferred as the financial situation of the creditor deteriorated in 2022.
The New ArchivesPublicly released Monday, DCG, CEO Barry Silbert and affiliated managers orchestrated fraudulent transfers and misleading disclosures.
A Delaware Channyy Court complaint claims that Genesis was “exploited recklessly, operated and then bankrupt” was by her parent company, after “a spectacular campaign of fraud and self -handling.”
Silbert is said to come in ‘coming in to hide the crisis at Genesis from his lenders’, while ‘it was’ sharp conscious ‘of risks embedded in Genesis’ loan book, and his ‘vulnerability to twins and Bitvavo’, claim the lawsuits.
Grayscale Investments reportedly benefited from the misconduct, although it is not mentioned as a defendant.
If the court rules the rules for Genesis, the case could serve as a precedent that “the rights of the creditor would strengthen, would expand the liability for parent companies in digital financing, since it relates to the piercing of the business veil”, and determine new standards for transparency and responsibility in the crypto -industry, “Rossing industry,” Rossing industry, “Rossing industry,” Rossing industry, “Rossing industry,” Ross industry, “Ross industry,” Ross industry, “Ross industry,” Ross industry, “Ross. Decrypt.
Genesis is looking for more than $ 3.1 billion, including a promotion of $ 1.1 billion and more than $ 1.2 billion in disputed transfers, some of which have now been made in Crypto now appreciated at more than $ 2 billion.
Decrypt reached for legal representatives for both parties.
Promises and losses
Central to the Delaware entering, DCG’s issue of a 10-year-old Promesse of $ 1.1 billion in 2022 is intended to cover the losses of Genesis from Three Arrows Capital’s Standard.
The memorandum had an interest rate of 1% and reportedly would not provide real liquidity.
The lawsuits are supported by the Genesis Litigation Oversight Committee (LOC), appointed by the Bankruptcy Court to represent the interests of creditors.
The Commission claims that the defendants distribute misleading information and false financial reports to prevent a bank and to make a profit with the failing lender before its collapse.
The first signs of a bankrun “published on May 7, 2022” is the complaint of Delaware.
“Within three days, the price of Luna fell from $ 80 to almost zero per coin,” with the tokens (Terrausd and Luna) involved “in essence” and knew $ 45 billion in value at the time.
Transfers and recovery
Genesis has submitted a separate federal bankruptcy in New York, with details about $ 1.2 billion in alleged preferential transfers to DCG and insiders before Chapter 11 Submit in January 2023.
These transfers include $ 448 million for DCG, $ 136 million for DCG International and $ 101 million for the HQ Enhanced Yield Fund, among other things.
Genesis also claims that $ 34 million in tax payments to DCG were fraudulent and is looking for more than 19,000 BTC, 69,000 ETH and 17 million tokens on other digital assets.
DCG and former Genesis -CEO Michael Moro came in in January 2025 to pay $ 38 million to settle the costs that they have misled investors about the exposure of Genesis to the collapse of three arrow capital.
The SEC said that DCG made a “equipment false impression” of the financial health of the lender after the standard setting, while neither of them has admitted or denied the allegations.
By May 2024, Genesis had reached a proposed $ 2 billion settlement with DCG, although the lawsuit is underway.
“It is almost comically tragic: billions of dollars swirls between so -called ‘industrial leaders’ who are supposed to set the standard, but we are still debating about the basic principles of tax responsibility and fiduciary duty,” said Rossow.
Edited by Sebastian Sinclair
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