Digital Currency Group (DCG) has initiated a lawsuit against its subsidiary Genesis, a once-thriving crypto lender that has now ceased operations. This lawsuit claims that a $1.1 billion loan made to Genesis in 2022 was more than sufficient to cover any losses incurred after its collapse. DCG argues that Genesis has actually profited since the loan due to the increased value of recovered collateral from Three Arrows Capital, which had defaulted. The lawsuit contends that the obligations under the promissory note have been fully satisfied thanks to the appreciation of assets, specifically the Grayscale Bitcoin Trust shares, since the 2022 turmoil in the crypto market. Genesis, in response to a past lawsuit by DCG seeking $3.1 billion in damages, is alleging that DCG and its CEO Barry Silbert made fraudulent transfers during Genesis's downturn. This legal battle highlights the ongoing struggles within the crypto lending sector since the collapse of major firms during the market downturn in 2022, and reflects broader challenges faced by crypto companies stemming from the ripple effects of firms like FTX and Three Arrows Capital.

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