Genesis Files Two Lawsuits to Grab Hold of $3.3B from DCG and Barry Silbert

Genesis, the bankrupt cryptocurrency lender, has initiated a pair of lawsuits against its parent company, Digital Currency Group (DCG), and its CEO, Barry Silbert.

The lawsuits allege fraud, reckless mismanagement, and the misappropriation of over a billion dollars from the beleaguered firm.

On May 19, the Delaware Court of Chancery unsealed a complaint detailing the purported malfeasance. According to the document, DCG allegedly treated Genesis as a personal treasury, systematically draining funds through self-serving loans and concealed transfers, all while projecting a deceptive image of financial stability to external stakeholders.

The Lawsuit Against DCG and Silbert

The court-appointed Litigation Oversight Committee (LOC), representing Genesis creditors, asserts that someone illicitly transferred over a million digital coins, valued at approximately $2.1 billion, out of Genesis as the company neared insolvency.

The creditors’ complaint reveals that the bankrupt crypto lender remains indebted for approximately $2.2 billion in crypto assets as of February 9, 2025. This sum includes substantial quantities of digital currencies, specifically 19,086 Bitcoin, 69,197 Ether, and more than 17.1 million other tokens, in addition to significant unpaid fees and accrued interest.

The lawsuit accuses Silbert, Michael Kraines, and Mark Murphy of planning misleading deals at the end of the second and third quarters of 2022. These deals were meant to trick Genesis lenders into thinking that DCG was giving money and support to Genesis, when it wasn’t.

Genesis claims it had to accept Grayscale Bitcoin Trust (GBTC) shares as collateral but could not sell them, exposing the company to considerable risk. The lawsuit details that the SEC imposed a six-month lockup period on GBTC after purchase, preventing its sale. Even after the lockup period expired, DCG allegedly forbade Genesis from reselling GBTC.

Genesis Seeks $3.3 Billion Recovery

A second lawsuit, filed in the U.S. Bankruptcy Court for the Southern District of New York, also claims that DCG and its related companies took out over $1.2 billion in U.S. dollars and cryptocurrencies in the year before Genesis filed for bankruptcy.

The liquidators claim these withdrawals occurred strategically around significant market events, specifically the collapses of Terra-Luna, Three Arrows Capital, and FTX, when Genesis was demonstrably insolvent. Internal records indicate insiders recovered their funds in full, while regular and institutional creditors absorbed the losses. Genesis seeks to recover over $3.3 billion via these two lawsuits.

In April 2025, a New York judge ruled that most of the New York Attorney General’s civil fraud lawsuit against DCG, Silbert, and former Genesis CEO Michael Moro could proceed.

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