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2d ago

Genesis Sues DCG for $3.1 Billion Over Alleged Fraud and Asset Transfers

The lawsuits claim DCG and CEO Barry Silbert used Genesis as a corporate alter ego to conceal losses, enrich affiliates, and mislead creditors before its bankruptcy.

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Overview

  • Genesis Global has filed dual lawsuits in Delaware and New York, seeking to recover over $3.1 billion in alleged fraudulent transfers and an ineffective promissory note.
  • The complaints accuse Digital Currency Group (DCG) of using Genesis as a financing arm to enrich affiliates, including Grayscale Investments, while concealing mounting losses from creditors.
  • Central to the lawsuits is a disputed 10-year, $1.1 billion promissory note issued by DCG in 2022, which allegedly failed to provide real liquidity after the collapse of Three Arrows Capital.
  • Genesis's Litigation Oversight Committee alleges insider enrichment, claiming executives drained at least $407 million in assets during key market crashes while projecting solvency.
  • The legal actions build on earlier regulatory settlements, including a $38 million SEC agreement in January 2025 over misleading disclosures about Genesis's financial health.