Worse than Enron
https://x.com/TheGenesisLOC/status/1938297500089159787
https://www.businesswire.com/news/home/20250624270726/en/Unsealed-Delaware-Complaint-Highlights-Extensive-Allegations-Against-DCG-Barry-Silbert-and-Insiders
https://cointelegraph.com/news/unsealed-genesis-lawsuit-dcg-alter-ego-scheme
https://www.genesisloc.com/complainthighlights-page
Delaware Complaint Highlights
Knowledge of Wrongdoing
"Kraines even admitted that a future plaintiff could argue that Genesis was DCG's alter ego. 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 this Verified Complaint" (paragraph 53)
Breach of Fiduciary Duty
"Genesis did not have a separate, independent existence from DCG. This was no secret at DCG. Internal DCG communications exhaustively document DCG's understanding that Genesis was DCG's alter ego" (paragraph 53)
False Marketing Campaign
“DCG required Genesis employees to recite the Silbert lines to customers when answering questions about Genesis’s financial state in the wake of the 3AC collapse. These DCG-scripted falsehoods were designed to induce customers, counterparties, and lenders, including those of Gemini and Bitvavo, to keep their valuable crypto and fiat currencies on the Genesis platform and continue depositing more” (paragraph 12)
Fraudulent Accounting Cover-Ups
“Silbert, Kraines, and Murphy each aided and abetted Moro’s breaches of fiduciary duty to Genesis, including to act in the interest of Genesis and its creditors. Instead of acting in those interests, Moro knowingly failed to implement proper risk protocols, signed the commercially unreasonable Promissory Note, and knowingly permitted and participated in DCG’s campaign of lies directed at the public Genesis creditors” (paragraph 277)
DCG’s Alter Ego
“DCG’s compliant pawn, Genesis’s former ‘CEO’ Moro, unsurprisingly stood by and allowed DCG to pilfer Genesis; the Genesis employees who disagreed with Silbert or refused to do DCG’s bidding were terminated and faced Silbert’s influential wrath in the industry” (paragraph 8)
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Systemic Control Failures
“Genesis was severely undercapitalized, lacked reasonable risk management, and had no board of directors or independent management of its own." (paragraph 1)
False Narrative, Real Losses
“Silbert and his cronies recklessly operated, exploited, and then bankrupted Genesis following a spectacular campaign of fraud and self-dealing. Silbert used Genesis to enrich himself and finance his broader cryptocurrency empire on off-market, unfair terms before overseeing its demise” (paragraph 1)