Business News Report
March 06, 2024

Digital Currency Group (DCG) Files Motion Seeking Dismissal of New York Attorney General’s Lawsuit

In Brief

DCG CEO Barry Silbert filed motion against New York attorney general’s allegations that he concealed losses to deceit customers and investors.

Digital Currency Group (DCG) Files Motion Seeking Dismissal of New York Attorney General’s Lawsuit

Parent company of bankrupt Genesis Global Capital, Digital Currency Group (DCG) has filed a motion to dismiss the lawsuit brought by New York Attorney General Letitia James against the firms. Barry Silbert, the CEO and founder of DCG, submitted the motion against allegations that he concealed losses at the firms, purportedly leading to deceit of customers and investors.

The lawsuit, initiated in October last year and expanded recently, claims that investors associated with the defunct Gemini Earn product and those with direct investments in DCG subsidiary Genesis were defrauded of $3 billion. This was allegedly due to DCG and others hiding losses incurred during the collapse of crypto firms like Three Arrows Capital (3AC) and FTX.

“Today, DCG and Barry Silbert filed motions to dismiss the meritless civil complaint filed by the New York Attorney General against Gemini, Genesis, and DCG. As we have stated from the beginning, the allegations are a thin web of baseless innuendo, blatant mischaracterizations, and unsupported conclusory statements,” stated DCG in a blog post.

The lawsuit alleges that the companies were aware of under-secured loans and high concentrations with FTX’s sister company, Alameda Research. Additionally, it claims that DCG and Silbert concealed financial discrepancies through a promissory note between the parent company and Genesis.

“DCG invested hundreds of millions of dollars of additional capital into Genesis after the collapse of Three Arrows Capital. This is in addition to the $1.1 billion promissory note, which is a binding obligation, properly vetted and endorsed by DCG’s board of directors, accountants, and other advisors that DCG remains committed to,” the company statement added further.

Moreover, Genesis proposed a settlement with the New York attorney general’s office last month, a move objected to by DCG, calling it “a back-door attempt to circumvent U.S. bankruptcy law”.

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About The Author

Victor is a Managing Tech Editor/Writer at Metaverse Post and covers artificial intelligence, crypto, data science, metaverse and cybersecurity within the enterprise realm. He boasts half a decade of media and AI experience working at well-known media outlets such as VentureBeat, DatatechVibe and Analytics India Magazine. Being a Media Mentor at prestigious universities including the Oxford and USC and with a Master's degree in data science and analytics, Victor is deeply committed to staying abreast of emerging trends. He offers readers the latest and most insightful narratives from the Tech and Web3 landscape.

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Victor Dey
Victor Dey

Victor is a Managing Tech Editor/Writer at Metaverse Post and covers artificial intelligence, crypto, data science, metaverse and cybersecurity within the enterprise realm. He boasts half a decade of media and AI experience working at well-known media outlets such as VentureBeat, DatatechVibe and Analytics India Magazine. Being a Media Mentor at prestigious universities including the Oxford and USC and with a Master's degree in data science and analytics, Victor is deeply committed to staying abreast of emerging trends. He offers readers the latest and most insightful narratives from the Tech and Web3 landscape.

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