Headline: Court revives New York fraud claim against Barry Silbert and DCG in Genesis Yield litigation
A federal judge has revived a New York common-law fraud claim against Barry Silbert, Digital Currency Group (DCG) and other defendants in litigation tied to the failed Genesis Yield program, breathing new life into one strand of a sprawling post-collapse legal battle.
What the court decided
- Judge Stefan Underhill of the U.S. District Court for the District of Connecticut revised a February order and agreed to reconsider certain state-law claims after plaintiffs argued the Class Action Fairness Act (CAFA) gives the federal court jurisdiction. As a result, the New York fraud claim was reinstated.
- The ruling leaves intact federal securities claims the court allowed to proceed in February.
- Several state consumer-protection claims were dismissed (Illinois, Kansas, Nevada, Texas), while others were stayed (California, Florida, New York).
Why it matters
The revived New York fraud claim means investors can pursue allegations that Silbert, DCG and other defendants misled customers about Genesis’ financial condition and risk controls before the lender froze withdrawals and filed for bankruptcy in early 2023. Plaintiffs say the Genesis Yield product—marketed as a way for customers to deposit crypto and earn interest—was presented as safer than it actually was, even as Genesis allegedly faced severe financial stress.
Where this fits in the broader litigation
- Genesis filed separate lawsuits in 2025 against DCG, Silbert and other insiders seeking to recover more than $1 billion in alleged improper transfers.
- Genesis entered bankruptcy after the collapses of Three Arrows Capital and FTX put heavy pressure on crypto lenders. A bankruptcy judge approved a 2024 plan allowing Genesis to distribute billions in cash and crypto to creditors while rejecting a challenge by DCG.
- Genesis reached a $2 billion settlement with the New York Attorney General that created a victims’ fund for creditors.
- DCG later reached an SEC settlement: DCG and former Genesis CEO Soichiro “Michael” Moro agreed to pay $38.5 million to resolve charges they misled investors about Genesis’ finances; neither admitted nor denied the SEC’s findings.
DCG’s position and next steps
DCG has previously called the allegations “baseless” and said it will defend itself. The recent ruling does not resolve the truth of the claims—it simply permits the New York fraud claim and the federal securities claims to move forward while other state consumer claims remain either paused or dismissed. The decision adds another active legal track for DCG and Silbert as the litigation landscape surrounding Genesis continues to evolve.
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