Genesis sues parent company DCG for disputed transfers

The lender of Crypto Genesis Global Capital brought two proceedings against his parent company, Digital Currency Group, and CEO Barry Silbert, seeking to recover more than a billion dollars of allegedly inappropriate transfers made while Genesis was insolvent.

According to a May 20 report By Bloomberg Law, Genesis accuses DCG and the initiates of “self-package, fraud and mismanagement”, saying that they have channeled the funds to themselves through imprudent loan practices and deceptive financial disclosure. The complaint, partially exposed, requires the return of 1 million digital assets worth around 2.1 billion dollars to reimburse the creditors.

The pursuit of Delaware alleys that DCG and its affiliates, including gray level investments, have been enriched to the detriment of Genesis customers by deceiving the lender’s financial health market.

In a separate legal action filed the same day before the American bankruptcy court for the South New York district, Genesis seeks to recover more than a billion dollars of transfers made in the year preceding its bankruptcy In January 2023. These include $ 448 million at DCG, $ 136 million at DCG International and $ 101 million in the HQ improvement fund, among others. Genesis also wants to recover 34 million dollars in tax payments which, according to them, were fraudulent.

The deposit affirms that these transactions took place in the middle of the bustle of the 2022 cryptographic market, which included the collapse of Terra-Luna, Three Arrows Capital and FTX. According to reports, Genesis was already insolvent by the end of 2021 and owed $ 14 billion in unpaid loans.

Genesis’ legal team maintains that DCG initiates knew the lender’s growing risks but did nothing about them. To protect DCG from the financial consequences of Genesis, they would have rather transferred internal assets.

Genesis filed a request for protection of chapter 11 in January 2023 and completed its restructuring in August 2024, distribution About $ 4 billion in cash and crypto for creditors. This plan, which DCG oppositeincluded a payment of $ 2.2 billion in Gemini to win users and not capped overlapping depending on the current prices of assets.

The two proceedings aim to hold the DCG responsible for its presumed involvement in the disappearance of Genesis and to stimulate the recovery of creditors.