Unsealed Delaware Complaint Highlights Extensive Allegations Against DCG, Barry Silbert, and Insiders

Newly unredacted filing reveals evidentiary details surrounding alleged breaches of fiduciary duty, fraud, and preferential transfers that devastated Genesis creditors and resulted in the company’s bankruptcy

The Genesis Litigation Oversight Committee is committed to transparency in the cryptocurrency industry and bringing to light the wrongdoing

A complaint filed on May 13, 2025, in the Delaware Court of Chancery against Genesis’s parent company, Digital Currency Group Inc., its CEO Barry Silbert, former Genesis CEO Michael Moro, DCG advisor Ducera Partners LLC, and its CEO Michael Kramer, is now available to the public in full

NEW YORK–(BUSINESS WIRE)–The Genesis Litigation Oversight Committee (“LOC”) today announced the public release of a fully unredacted version of its previously filed Delaware Court of Chancery complaint (“Delaware Complaint”), which lays out important evidence against Digital Currency Group Inc. (“DCG”), its CEO Barry Silbert, and a network of insiders accused of fiduciary breaches and fraud at Genesis Global Capital (“Genesis”) while the company was insolvent. Today’s news follows the LOC’s announcement on May 19, 2025, that it had filed two major lawsuits against DCG, Barry Silbert, and a network of insiders.

This release introduces internal emails, strategy memos, and risk assessments into the public record, exposing how insiders allegedly looted Genesis in its final months while misleading customers.

“After working tirelessly to reveal the details of what happened at Genesis in the lead-up to its bankruptcy filing, the LOC’s efforts are now fully accessible to the public,” said Philippe Selendy of Selendy Gay. “The Delaware Complaint alleges that Silbert and his insiders exploited Genesis for their own benefit, and internal DCG and Genesis documents that are now available provide more detail than ever seen before.”

“These are not merely technical disputes over intercompany accounting,” said the Genesis Litigation Oversight Committee. “The Delaware Complaint exposes a deliberate scheme by DCG and Barry Silbert to pillage Genesis as it collapsed—siphoning value for insiders while leaving creditors fully out to dry. The level of coordination, secrecy, and callousness alleged is nothing short of breathtaking, and we are pleased that this evidence is now available to the public.”

Through extensive documents from the files of DCG and Genesis—ranging from internal emails to scripted talking points—the unredacted Delaware Complaint paints an even more vivid picture of DCG and Silbert treating Genesis as its “de facto treasury” to finance below-market loans to favored insiders and related entities while also fueling leveraged trading in GBTC by counterparties such as Three Arrows Capital (“3AC”) without due regard for the extreme risk to Genesis.

Among the most damning revelations, the Delaware Complaint alleges:

• Internal awareness and recognition that Genesis was DCG’s alter ego
  • DCG Chief Financial Officer Michael Kraines admitted that DCG’s operation of Genesis could allow a future plaintiff to argue that Genesis was DCG’s alter ego. In an internal memo, he wrote to Moro and others to pose a “war-gaming exercise” addressing the arguments the plaintiff would make if Genesis went bankrupt, which closely track the allegations in the Delaware Complaint:

“The question on my mind simply put is “if Genesis were to somehow blow itself up could that somehow tank DCG to the profound detriment of its board and shareholders?” My prefatory thinking here is as follows:

1. Let’s assume that something catastrophic happens and Genesis faces deep pocketed creditors who are very unhappy and more than willing to retain expensive litigators.
2. Our baseline assumption is that the plaintiffs’ counsel will sue DCG in this event under some version of a piercing the corporate veil theory. Our purpose is to war game this and mitigate the risk.
3. In our hypothetical, plaintiffs’ counsel makes the following arguments (this is just top of mind – not researched):
   1. Yes there is a Genesis contract that says that DCG and related entities aren’t liable but that’s just boilerplate/adhesion contract stuff that pales in the face of the other facts.
   2. Genesis is the puppet of DCG. It is 100% owned and controlled by DCG and does what DCG tells it to do. Discovery of emails will be produced to support this.
   3. Genesis is very clearly undercapitalized as an entity. There is not enough equity to support a multi-billion dollar loan book and global trading operation given all of the volatility and risk around this untamed crypto sector. Genesis is managed by super evil traders who naturally know all of this.
   4. Agents of Genesis (salespeople) have explicitly told customers and potential customers that Genesis is backed by DCG as a material inducement to getting them to do business with Genesis. Plaintiffs detrimentally relied upon the DCG name and backing when making their decision to place their sacred trust in Genesis as a counterparty. Witnesses will be produced to testify that that is the case.
   5. Net net the entire DCG/Genesis enterprise was in reality a single enterprise acting in close coordination to lure the less suspecting keepers of capital for widows and children into transacting with them. Clearly as a result DCG and its other subsidiaries must be held responsible for any harm done by Genesis.”

• DCG hired third-party consultants and ignored recommendations or implemented them too late
  • DCG admitted internally that Genesis was “flying blind” in terms of risk management as Genesis’s loan book grew from approximately $4 billion to $12 billion
  • Genesis’s external auditor informed DCG of significant deficiencies and material weaknesses in Genesis’s financial controls and the consequences of not addressing them as early as 2020
  • DCG established a “contagion” risk committee within Genesis, which was “designed to redress the series of current vulnerabilities to likely plaintiff attacks.” When the first risk committee meeting was scheduled nine months after it was established and approved by the DCG Board, Kraines joked that his “future deposition just got a bit easier.”

• DCG created a culture where Genesis employees were forced to prioritize DCG’s interests
  • As one Genesis employee aptly put it, in 2022, DCG kept Genesis alive “so [it] could pillage the balance sheet … prop [Genesis] up, give [the] impression of stability[,] then borrow while they c[ould] to get the cash out of it.”
  • Given DCG’s pervasive control over Genesis, DCG was able to instill a culture where “Genesis employees were forced to prioritize DCG’s interests.” Genesis insiders referred to their office culture as a “‘culture of submission,’” whereby Genesis “acquiesced to all of DCG’s demands.”

• Scripted falsehoods disseminated to the public about the health of Genesis
  • DCG required Genesis employees to recite DCG-approved misrepresentations to customers when answering questions about Genesis’s financial state in the wake of the 3AC collapse.
  • Silbert further publicly posted on social media about the health of the company
  • Tweet by Genesis on June 15, 2022, retweeted by Barry Silbert:

“Despite continued heightened market volatility, the Genesis balance sheet is strong and our business is operating normally. Our leading business continues to meet client demand. Our trading business remains an essential liquidity provider in the spot and derivatives markets.”

• Evidence of the alleged fraudulent activity preferential transfers, demonstrating that DCG’s alleged wrongdoing was timed to watershed moments in the crypto space that impacted Genesis
  • Further details on the infamous June 30, 2022, Promissory Note
  • Further details on the September 2022 roundtrip transaction

Accessing the Unredacted Delaware Complaint

The unredacted Delaware Complaint is now available on the Delaware Court of Chancery’s public docket and can be downloaded directly from the LOC’s website at www.genesisloc.com.

Advisors

Selendy Gay PLLC is serving as legal counsel, BRG is serving as financial advisor, and C Street Advisory Group is serving as strategy and communications advisor to the LOC.

About the Genesis Litigation Oversight Committee

The Genesis Litigation Oversight Committee (the “LOC”) is an independent, volunteer-driven body authorized by the court and elected by creditors. It was established to represent the interests of all Genesis creditors and pursue meaningful recovery—with a focus on reclaiming value through in-kind asset recovery. The LOC oversees litigation against Digital Currency Group, its CEO Barry Silbert, and key advisors. Comprised of experienced fiduciaries and legal professionals selected by creditors, the LOC is committed to exposing the misconduct that led to Genesis’s collapse and recovering billions in misappropriated assets for the benefit of all creditors. Please visit genesisloc.com for more information and follow its official X account for the latest updates on litigation developments and recovery efforts.

Contacts

Media Inquiries

GenesisLOC@thecstreet.com