Update May 20, 11:20 a.m. UTC: This article has been updated with comments from DCG.
Genesis has submitted a couple of complaints against his parent company Digital Currency Group (DCG) and his CEO Barry Silbert, who accused her of fraud, ruthless mismanagement and the suction of a couple of billion dollars from the crypto loan that has now been fanked.
On May 19, the Delaware Court of Chalancery didn’t seal a criticism through which it was described how DCG used Genesis as a company atm, which emptied funds through self -service loans and hidden transfers and at the identical time presented a improper image of monetary health.
In their judicial legal dispute committee committee (LOC), Genesis creditor claims that over one million digital coin-IM value of around 2.1 billion US dollar route was led as a genesis within the direction of collapse.
According to the criticism, Genesis believers still have crypto assets value around 2.2 billion US dollars, including 19,086 Bitcoin (BTC), 69.197 Ether (Eth) and over 17.1 million other tokens in addition to significant non -paid fees and interest from February 9, 2025.
At the center of the lawsuit is the claim that Silbert and other insiders ignore fundamental risk controls and have included genesis in ruthless lending practices, which ultimately served to do that, DCGS Crown Jewel, Graycale Investments.
DCG withdrew 1.2 billion US dollars from Genesis from bankruptcy
The criticism describes Genesis as with out a board or independent supervision, with essential decisions being made to counterpoint DCG on the expense of the insert.
“In particular, Silbert, Kraines and Murphy orchestrated false transactions at the top of the second and third quarter of 2022, when Genesis was closed to deceive Genesis lenders that DCG Genesis provided liquidity and justice for Genesis,” explains the criticism.
Genesis also said that it was forced to simply accept illiquid gray levels -Bitcoin Trust (GBTC) parts as collateral, and it took them to sell them, creating essential risks of evaluation.
“GBTC was Illiquid since it couldn’t be sold for six months attributable to an purchase based on a blocking time imposed by the SEC, and DCG prohibitions Genesis to award GBTC even after the Lockup period ended,” the criticism said.
The criticism names DCG, Barry Silbert, the previous CEO of Genesis Michael Moro, the previous CFO of DCG, Michael Kraines, DCG President Mark Murphy and the investment banker DCG, Ducera Partners as accused.
Source: Genesisloc
In a second criticism, which was submitted to the US insolvency court for the southern district of New York, DCG and its affiliated corporations claim to be attributable to Genesis in US dollars and cryptocurrencies over $ 1.2 billion within the 12 months before the insolvency of Genesis.
These payments, because the LOC argued, got essential market events resembling the collapse of Terra-Luna, three arrows in capital and FTX, through which Genesis was already insolvent.
Internal submissions indicate that insiders have regained 100% of their means, while retail and institutional creditors have been released.
“These groundless complaints recycled the identical drained, two-year claims in an opportunistic attempt by sophisticated investors to extract additional value from DCG,” said a DCG spokesman for CoinTelegraph. They added:
“We have worked along with a wide range of stakeholders in good faith to try to attain a comprehensive solution to the DCG-related points of the Genesis insolvency. We will vigorously defend ourselves against these false demands.”
Genesis tries to regain billions
Overall, Genesis tries to reclaim greater than 3.3 billion US dollars concerning the two complaints.
In April 2025, a New York judge decided that the vast majority of the New York general prosecutor against DCG, Silbert and the previous CEO of Genesis, CEO of Genesis, Michael Moro, can progress.
The lawsuit accuses DCG and his bankruptcy-aggression-arm genesis of misleading investors after the collapse of the crypto hedge fund three arrow capital, which is alleged to have masked a deficiency of $ 1 billion with a 10-year low-interest debt.
While Gemini and Genesis have settled, DCG and the managers fought for the indictment.
Genesis reported bankruptcy with 14 billion US dollars of outstanding loans in early 2023.
