Genesis Sues DCG, Barry Silbert for $3.1 Billion, Targeting $1.1 Billion Note and Crypto Transfers

Genesis Global Capital has filed two lawsuits against its parent company, Digital Currency Group (DCG), and CEO Barry Silbert, seeking to recover more than $3.1 billion for creditors. The suits were filed in both the Delaware Chancery Court and the US Bankruptcy Court for the Southern District of New York and are backed by the Genesis Litigation Oversight Committee.

Genesis alleges that DCG and its executives engaged in fraud, insider enrichment, and improper asset transfers as the lender’s financial condition deteriorated in 2022. The complaints state that DCG used Genesis as a corporate ‘alter ego’ to benefit affiliates, and that Grayscale Investments benefited from the misconduct, though it is not named as a defendant.

Central to the Delaware filing is a 10-year, $1.1 billion promissory note issued by DCG in 2022, which Genesis claims failed to provide real liquidity and was intended to cover losses from the default of hedge fund Three Arrows Capital. The lawsuits also seek to recover over $1.2 billion in allegedly improper or preferential transfers, including $448 million to DCG, $136 million to DCG International, and $101 million to HQ Enhanced Yield Fund. Genesis is seeking in-kind recovery of over 19,000 BTC, 69,000 ETH, and 17 million tokens across other digital assets, with crypto assets valued at up to $2.1 billion.

Genesis claims that some of these transfers occurred while the company was insolvent, and that $34 million in tax payments to DCG were fraudulent. The complaints further allege that DCG and Silbert misrepresented the company’s finances, contributing to the 2022 crypto market collapse, which included the Terra-Luna collapse and a bank run starting May 7, 2022. Genesis had $14 billion in outstanding loans by the end of 2021 and filed for bankruptcy in 2023.

DCG and former Genesis CEO Michael Moro agreed in January 2025 to pay $38 million to settle SEC charges related to misleading investors about Genesis’s exposure to the Three Arrows Capital collapse. DCG has denied the latest allegations, calling the lawsuits baseless and stating it will defend itself against the claims. Genesis reached a proposed $2 billion settlement with DCG by May 2024, but litigation remains ongoing.

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