Crypto lender Genesis Global Capital has filed two lawsuits against its parent company, Digital Currency Group, and CEO Barry Silbert, seeking to recover over $1 billion in allegedly improper transfers made while Genesis was insolvent.
According to a May 20 report by Bloomberg Law, Genesis accuses DCG and insiders of “self-dealing, fraud, and mismanagement,” claiming they funneled funds to themselves through reckless lending practices and deceptive financial disclosures. The complaint, partially redacted, seeks the return of 1 million digital assets worth approximately $2.1 billion to repay creditors.
The Delaware suit alleges DCG and its affiliates, including Grayscale Investments, enriched themselves at the expense of Genesis customers by misleading the market about the lender’s financial health.
In a separate lawsuit filed the same day in the U.S. Bankruptcy Court for the Southern District of New York, Genesis seeks to claw back over $1 billion in transfers made in the year leading up to its bankruptcy in January 2023. These include $448 million to DCG, $136 million to DCG International, and $101 million to HQ Enhanced Yield Fund, among others. Genesis also wants to recover $34 million in tax-related payments it says were fraudulent.
The filing claims these transactions occurred amid 2022’s crypto market turmoil, which included the collapse of Terra-Luna, Three Arrows Capital, and FTX. According to reports, Genesis was already insolvent by the end of 2021 and owed $14 billion in unpaid loans.
The legal team for Genesis argues that DCG insiders knew about the lender’s growing risks but did nothing about them. To protect DCG from Genesis’ financial consequences, they allegedly transferred assets internally instead.
Genesis filed for Chapter 11 protection in January 2023 and completed its restructuring in August 2024, distributing roughly $4 billion in cash and crypto to creditors. That plan, which DCG opposed, included a $2.2 billion payout to Gemini Earn users and uncapped recoveries based on current asset prices.
Both lawsuits seek to hold DCG responsible for its alleged involvement in Genesis’ demise and boost creditor recoveries.
