DCG and Genesis Global Capital File Motions to Dismiss Lawsuit
Digital Currency Group (DCG), along with its subsidiary Genesis Global Capital, and DCG’s founder and CEO, Barry Silbert, have filed motions to dismiss a lawsuit brought against them by the New York Attorney General. The lawsuit, which was initiated in October 2023 and expanded the following month, alleges that DCG, Genesis, and Silbert defrauded investors, resulting in losses of $3 billion connected to the collapse of Three Arrows Capital and FTX.
Contested Proposed Settlement
The recent motion to dismiss comes after a controversial proposed settlement between Genesis and the New York Attorney General, which DCG objected to. Previously, DCG had also opposed a settlement between the NYAG and Genesis. This deal had led to charges against Genesis being dropped by the prosecutor. However, DCG criticized the agreement as improper, describing it as a “back-door attempt to circumvent U.S. bankruptcy law” and a “subversive arrangement.”
Concerns Over Premature Sale of Trusts
In addition to their opposition to the settlement, DCG sought to delay a deal in which Genesis Global Holdco was permitted by the bankruptcy court to sell 35 million GBTC worth over $1.3 billion in order to satisfy creditor claims. DCG expressed concerns over the premature sale of trusts and believed that court approval of a debt repayment plan should be obtained before any such sale took place.
Genesis’ Lawsuit Against DCG
Prior to these legal disputes, Genesis had sued DCG for repayment of $620 million in loans. However, DCG later announced that it would pay approximately $700 million in favor of the lending platform, demonstrating its commitment to fulfilling its obligations to creditors.
Hot Take: DCG and Genesis Fight Back Against Lawsuit
DCG, Genesis Global Capital, and their CEO Barry Silbert have taken a proactive stance by filing motions to dismiss the lawsuit brought against them by the New York Attorney General. The legal battle stems from allegations of defrauding investors and significant losses linked to the collapse of Three Arrows Capital and FTX. However, DCG has not only opposed a proposed settlement but also expressed concerns over the premature sale of trusts. Meanwhile, Genesis had previously sued DCG for loan repayment, but DCG has shown its commitment to meeting creditor obligations.
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