Genesis demands DCG for fraudulent maneuvers that pronounced their collapse

The crypto loan subsidiary accuses its parent company of emptying its funds while the platform was in the process of bankruptcy.

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• Genesis seeks to recover USD $ 3.2 billion in two separate demands
  
• Accuses DCG Already its CEO, Barry Silbert, of fraud and self-benefit
  
• The demands point to pronounced capital withdrawals while Genesis He was already insolvent

Global Capital Genesisthe well -known cryptocurrency loan platform that was declared in bankruptcy in 2023, He has initiated forceful legal actions against his own parent company, Digital Currency Group (DCG)and his CEO Barry Silbert, accusing them of fraudulent financial maneuvers that would have aggravated their collapse.

The demands, which together seek to recover a total of USD $ 3.2 billion, were presented by Genesis and its creditors in two key jurisdictions: one in the Ministry of Foreign Affairs of the State of Delaware for USD $ 2.2 billion and another before the bankruptcy court of the Southern District of New York for more than USD $ 1 billion.

Accusations of emptying of funds prior to bankruptcy

Demand in New York argues that, during the year before Genesis It would be declared in bankruptcy under Chapter 11, the company allowed massive withdrawal of funds by Dcg, Silbert and other senior executives and affiliates, despite the fact that the company was already insolvent, as details COINDESK.

According to judicial documents, these people “They knew, thanks to their close relationship with Genesis, that the business was on the verge of collapse.” And yet “They withdrew all of their assets and recovered 100% of cryptocurrency and dollars loans” They had delivered to the platform. Meanwhile, the public and other creditors “They had no knowledge about these movements”indicates the complaint.

Genesis He suspended retreats in November 2022, in the midst of the growing liquidity crisis that affected multiple actors in the crypto ecosystem. Finally, the company declared bankruptcy in early 2023.

Silbert accused of operating with negligence and self-interest

In the demand filed in Delaware, the lawyers of Genesis They affirm that “Silbert and his companions operated recklessly, exploded and then led to bankruptcy to Genesis after a spectacular fraud and self-benefit campaign.”

The letter also reveals that creditors still face a deficit of USD $ 2.2 billion in crypto assets, including BTC, eth and other tokens.

In addition to monetary damage, Genesis requests the creation of an equitable trust on any asset that the defendants have missed or converted during their management as executives and managers of the company.

For its part, DCG sharply rejected the accusations through a spokesman, who declared that the demands are “Unfounded accusations that recycle the same arguments spent two years ago” and that they only represent a “Opportunistic attempt by sophisticated investors to extract more DCG value.”

The parent company claimed to have worked in good faith with a wide range of interested parties to try to achieve a comprehensive solution on aspects related to bankruptcy Genesis. In addition, he warned that he will defend himself “Fetgically against these false statements.”

The crypto ecosystem still digests the collapse of Genesis

Genesis He was one of the most important actors in the institutional loan business of cryptocurrencies during the boom in the market. His collapse was one of the most emblematic episodes of the liquidity crisis that followed the fall of platforms such as FTX and Celsius, leaving numerous customers without access to their funds.

The legal fight against its own parent company adds one more complexity and tension layer to the restructuring process, in addition to offering a window to the possible abusive practices that could have occurred within one of the most influential conglomerates of the crypto ecosystem.

These demands are expected to reveal more details about the internal operations of DCG And your relationship with Genesis, which could influence future regulatory decisions and the confidence of institutional investors.

Article written by a content editor. Edited by Angel Di Matteo / Diariobitcoin

Original image of Diariobitcoin, created with artificial intelligence, for free use, licensed under public domain.

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