Genesis, the now-bankrupt cryptocurrency lender, has filed two lawsuits against its parent company, Digital Currency Group (DCG), and DCG’s CEO, Barry Silbert.

The lawsuits accuse them of fraud, reckless mismanagement, and siphoning off more than a billion dollars in value from Genesis, contributing to its financial collapse.

Delaware Court Unseals Complaint Alleging DCG Used Genesis as “Corporate ATM”

On May 19, the Delaware Court of Chancery unsealed a detailed complaint outlining the allegations. The lawsuit claims that DCG treated Genesis as a “corporate ATM,” systematically draining funds through a series of self-serving loans and hidden transfers.

These actions allegedly masked the true financial condition of Genesis, misleading investors, creditors, and regulators.

According to the complaint, DCG’s management created a false appearance of financial stability, which helped delay the fallout and allowed them to continue extracting value even as Genesis was struggling.

The suit paints a picture of a parent company prioritizing its own interests over the survival of its subsidiary and its stakeholders.

This legal action highlights the growing scrutiny of governance and financial practices within crypto firms, particularly amid the sector’s recent downturns.

The outcome could have major implications for accountability in the cryptocurrency industry and the ongoing fallout from Genesis’s bankruptcy.

Also Read: Digital Currency Group pays off a whooping $700m of debt with Genesis

Complaint Alleges Genesis Lacked Oversight, Favored DCG Over Depositors

The complaint alleges that Genesis operated without a proper board or independent oversight, allowing key decisions to benefit its parent company, Digital Currency Group (DCG), rather than depositors.

It accuses CEO Barry Silbert and others of orchestrating fake transactions at the end of the second and third quarters of 2022 to mislead Genesis lenders.

These transactions made it appear as though DCG was injecting liquidity and equity into Genesis, when in fact it was not. Additionally, Genesis claims it was forced to accept illiquid Grayscale Bitcoin Trust (GBTC) shares as collateral but was prohibited from selling them.

This restriction created significant valuation risks, exposing Genesis to potential losses and undermining its financial stability. The complaint highlights alleged deceptive practices that contributed to Genesis’s downfall.

Genesis Seeks $3.3B in Lawsuits Against DCG and Executives

Genesis is pursuing over $3.3 billion in damages through two lawsuits targeting its parent company, Digital Currency Group (DCG), and related executives.

In April 2025, a New York judge allowed most of the civil fraud lawsuit filed by the New York Attorney General against DCG, CEO Barry Silbert, and former Genesis CEO Michael Moro to proceed.

The lawsuit accuses DCG and Genesis of misleading investors following the collapse of the crypto hedge fund Three Arrows Capital. Specifically, the complaint alleges that DCG concealed a $1 billion shortfall by issuing a 10-year, low-interest promissory note to cover the deficit, effectively masking the company’s financial troubles.

This alleged deception contributed to investor losses and heightened scrutiny over governance and transparency within crypto firms.

The legal battles reflect the ongoing fallout from major crypto industry failures and raise important questions about accountability in digital asset management.

Also Read: Genesis Trading Moves $1.5B In Bitcoin & Ethereum For Creditor Repayments