Digital Currency Group submits request to cancel New York AG lawsuit

Digital Currency Group, its subsidiary Genesis Global Capital, and DCG’s founder and CEO, Barry Silbert, filed motions to dismiss a lawsuit filed by the New York Attorney General.

The lawsuit, initiated in October 2023 and expanded in the following month, accuses DCG, Genesis, and Silbert of defrauding investors, alleging losses of $3 billion linked to the collapse of Three Arrows Capital and FTX.

The motion follows a contested proposed settlement between Genesis and New York Attorney General Letitia James, which DCG objected to.

Previously, DCG opposed a settlement between the NYAG and Genesis, following a deal struck earlier with the prosecutor to drop charges against Genesis, a bankrupt crypto lender and one of DCG’s companies.

DCG criticized the agreement as improper, characterizing it as a “back-door attempt to circumvent U.S. bankruptcy law” and a “subversive arrangement.” Additionally, Genesis Global Holdco was permitted by the bankruptcy court to sell 35 million GBTC worth over $1.3 billion to satisfy creditor claims.

DCG sought to delay this deal pending court approval of a debt repayment plan, expressing concern over the premature sale of trusts.

Genesis previously sued DCG to repay $620 million in loans, with DCG later announcing the payment of approximately $700 million in favor of the lending platform, demonstrating its commitment to satisfying creditor obligations.