Genesis Global Capital, a major cryptocurrency lender, filed two lawsuits against Digital Currency Group, its parent company, and CEO Barry Silbert to potentially recover over $3 billion.

The filings include a $1.1 billion promissory note and over $1.2 billion in allegedly improper transfers.

The now-defunct institutional crypto lender, with over 100,000 creditors, claims that DCG and its affiliates transferred billions of dollars worth of crypto and fiat assets from Genesis while the company was insolvent.

Genesis claimed in the lawsuit that DCG issued a fake 10-year promissory note, worth $1.1 billion, to conceal a massive hole in its balance sheet caused by the collapse of Three Arrows Capital, a Singapore-based crypto hedge fund that collapsed in June 2022.

The fallen crypto lender accuses DCG and Silbert of misleading investors about Genesis’ financial condition, particularly during the 2022 market turmoil, to prevent a bank run and protect their interests.

According to the filing with the Delaware Chancery Court, Genesis was insolvent by December 2021, but its bankruptcy surfaced in January 2023. Despite knowing this, DCG continued using the lender to fund its operations.

Moreover, the lawsuits highlight the importance of transparency and proper financial management within crypto firms.

In January this year, DCG faced a $38 million fine from the US Securities and Exchange Commission (SEC) for misleading investors.

If Genesis wins in the lawsuits, it could not only repay its high-profile creditors but also compensate for the losses of retail investors. It’s important to note that such lawsuits usually have lengthy processes.

The post Genesis Sued DCG: Can Fallen Lender Recover $3.1B? appeared first on Coinspeaker.

Genesis Global Capital, a major cryptocurrency lender, filed two lawsuits against Digital Currency Group, its parent company, and CEO Barry Silbert to potentially recover over $3 billion.

The filings include a $1.1 billion promissory note and over $1.2 billion in allegedly improper transfers.

The now-defunct institutional crypto lender, with over 100,000 creditors, claims that DCG and its affiliates transferred billions of dollars worth of crypto and fiat assets from Genesis while the company was insolvent.

Genesis claimed in the lawsuit that DCG issued a fake 10-year promissory note, worth $1.1 billion, to conceal a massive hole in its balance sheet caused by the collapse of Three Arrows Capital, a Singapore-based crypto hedge fund that collapsed in June 2022.

The fallen crypto lender accuses DCG and Silbert of misleading investors about Genesis’ financial condition, particularly during the 2022 market turmoil, to prevent a bank run and protect their interests.

According to the filing with the Delaware Chancery Court, Genesis was insolvent by December 2021, but its bankruptcy surfaced in January 2023. Despite knowing this, DCG continued using the lender to fund its operations.

Moreover, the lawsuits highlight the importance of transparency and proper financial management within crypto firms.

In January this year, DCG faced a $38 million fine from the US Securities and Exchange Commission (SEC) for misleading investors.

If Genesis wins in the lawsuits, it could not only repay its high-profile creditors but also compensate for the losses of retail investors. It’s important to note that such lawsuits usually have lengthy processes.

The post Genesis Sued DCG: Can Fallen Lender Recover $3.1B? appeared first on Coinspeaker.