A newly unsealed complaint from the bankrupt crypto lender Genesis reveals that executives at its parent company, Digital Currency Group (DCG), were aware of risk warnings and possible legal issues as Genesis faced collapse. Internal communications indicated that DCG's chief financial officer, Michael Kraines, had concerns about Genesis potentially being seen as DCG’s ‘alter ego.’ He prepared a memo outlining how the situation could adversely affect DCG's board and shareholders. Additionally, third-party risk consultants had issued serious warnings, which were ignored or dealt with too late. Genesis was flagged as ‘flying blind’ regarding its loan book's rapid growth from $4 billion to $12 billion. A ‘contagion risk committee’ was established to manage exposure but didn’t convene for nine months. The complaint also highlights a toxic work culture where staff were directed to prioritize DCG’s interests and to provide public statements minimizing the crisis, alongside controversial transactions aimed at concealing insolvency. Genesis is now pursuing claims against DCG, Barry Silbert, and other insiders.

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