Genesis files dual lawsuits to claw back $3.3B from DCG, Barry Silbert
Genesis has launched a pair of lawsuits against its parent company, Digital Currency Group (DCG), and its CEO, Barry Silbert, accusing them of fraud, reckless mismanagement and siphoning more than a billion dollars in value from the now-bankrupt crypto lender.
On May 19, the Delaware Court of Chancery unsealed a complaint detailing how DCG allegedly used Genesis as a corporate ATM, draining funds through self-serving loans and concealed transfers while presenting a false image of financial health.
Through their court-appointed Litigation Oversight Committee (LOC), Genesis creditors claim that over a million digital coins — worth about $2.1 billion — were funneled away, even as Genesis edged toward collapse.
As per the complaint, Genesis creditors are still owed around $2.2 billion worth of crypto assets, including 19,086 Bitcoin (BTC), 69,197 Ether (ETH) and over 17.1 million other tokens, along with significant unpaid fees and interest as of Feb. 9, 2025.
At the core of the lawsuit is the claim that Silbert and other insiders ignored basic risk controls and pushed Genesis into reckless lending practices that ultimately served to benefit DCG’s crown jewel, Grayscale Investments.
DCG withdrew $1.2 billion from Genesis before bankruptcy
The complaint describes Genesis as having operated without a board or independent oversight, with key decisions made to enrich DCG at the expense of depositors.
“In particular, Silbert, Kraines, and Murphy orchestrated sham transactions at the end of the second and third quarters of 2022, when Genesis’s books closed, to deceive Genesis lenders into believing that DCG was providing liquidity and equity to Genesis,” the complaint states.
Genesis also said it was forced to accept illiquid Grayscale Bitcoin Trust (GBTC) shares as collateral and was barred from selling them, creating major valuation risks.
“GBTC was illiquid because it could not be sold for six months after its purchase due to a lockup period imposed by the SEC, and DCG prohibited Genesis from reselling GBTC even after the lockup period ended,” the complaint states.
The complaint names DCG, Barry Silbert, former Genesis CEO Michael Moro, former DCG chief financial officer Michael Kraines, DCG President Mark Murphy and DCG’s investment banker Ducera Partners as defendants.
Related: Bankrupt crypto firm Genesis completes restructuring
A second complaint, filed in the US Bankruptcy Court for the Southern District of New York, alleges that DCG and its affiliates withdrew over $1.2 billion in US dollars and cryptocurrencies during the year leading up to Genesis’s bankruptcy.
These withdrawals, the LOC argued, were timed around major market events such as the collapses of Terra-Luna, Three Arrows Capital, and FTX — moments when Genesis was already insolvent.
Internal filings suggest insiders recovered 100% of their funds, while retail and institutional creditors were left exposed.
Genesis seeks to recover billions
In total, Genesis is seeking to recover more than $3.3 billion through the 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 can move forward.
The suit accuses DCG and its bankrupt lending arm Genesis of misleading investors after the collapse of crypto hedge fund Three Arrows Capital, allegedly masking a $1 billion shortfall with a 10-year, low-interest promissory note.
While Gemini and Genesis have settled, DCG and the executives have fought the charges.
Genesis filed for bankruptcy in early 2023 with $14 billion in outstanding loans.
Magazine: Father-son team lists Africa’s XRP Healthcare on Canadian stock exchange
The crypto industry is set to experience massive growth in the United Arab Emirates (UAE) due to its pro-tech and business regulations.
Without localized risk detection and public–private cooperation, illicit capital will continue to flow unchecked, and trust in the system will collapse.
Thousands more Afghan nationals may have been affected by another data breach, the government has said.
Up to 3,700 Afghans brought to the UK between January and March 2024 have potentially been impacted as names, passport details and information from the Afghan Relocations and Assistance Policy has been compromised again, this time by a breach on a third party supplier used by the Ministry of Defence (MoD).
This was not an attack directly on the government but a cyber security incident on a sub-contractor named Inflite – The Jet Centre – an MoD supplier that provides ground handling services for flights at London Stansted Airport.
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July: UK spies exposed in Afghan data breach
The flights were used to bring Afghans to the UK, travel to routine military exercises, and official engagements. It was also used to fly British troops and government officials.
Those involved were informed of it on Friday afternoon by the MoD, marking the second time information about Afghan nationals relocated to the UK has been compromised.
It is understood former Tory ministers are also affected by the hack.
Earlier this year, it emerged that almost 7,000 Afghan nationals would have to be relocated to the UK following a massive data breach by the British military that successive governments tried to keep secret with a super-injunction.
Defence Secretary John Healey offered a “sincere apology” for the first data breach in a statement to the House of Commons, saying he was “deeply concerned about the lack of transparency” around the data breach, adding: “No government wishes to withhold information from the British public, from parliamentarians or the press in this manner.”
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July: Afghan interpreter ‘betrayed’ by UK govt
The previous Conservative government set up a secret scheme in 2023 to relocate Afghan nationals impacted by the data breach, but who were not eligible for an existing programme to relocate and help people who had worked for the British government in Afghanistan.
The mistake exposed personal details of close to 20,000 individuals, endangering them and their families, with as many as 100,000 people impacted in total.
Read more on Sky News:
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A government spokesperson said of Friday’s latest breach: “We were recently notified that a third party sub-contractor to a supplier experienced a cyber security incident involving unauthorised access to a small number of its emails that contained basic personal information.
“We take data security extremely seriously and are going above and beyond our legal duties in informing all potentially affected individuals. The incident has not posed any threat to individuals’ safety, nor compromised any government systems.”
In a statement, Inflite – The Jet Centre confirmed the “data security incident” involving “unauthorised access to a limited number of company emails”.
“We have reported the incident to the Information Commissioner’s Office and have been actively working with the relevant UK cyber authorities, including the National Crime Agency and the National Cyber Security Centre, to support our investigation and response,” it said.
“We believe the scope of the incident was limited to email accounts only, however, as a precautionary measure, we have contacted our key stakeholders whose data may have been affected during the period of January to March 2024.”
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