Sign in

Genesis Global Capital

avoid.net/genesis-global-capital→8/100·93% conf.
[AI-DRAFTED · AWAITING VERIFICATION]
8/100
[CRITICAL]93% conf.

Summary

Genesis Global Capital, LLC was the crypto lending arm of Digital Currency Group (DCG), founded in 2013 as the first institutional OTC bitcoin trading desk. Following catastrophic loan exposures to Three Arrows Capital and FTX in 2022, Genesis suspended customer withdrawals in November 2022 and filed for Chapter 11 bankruptcy in January 2023, owing approximately $3.4 billion to creditors. The company subsequently settled with the SEC for $21 million and with the New York Attorney General for $2 billion, completed a $4 billion restructuring distribution in August 2024, and in May 2025 its post-bankruptcy Litigation Oversight Committee filed dual lawsuits totaling $3.3 billion against parent DCG and CEO Barry Silbert alleging fraud and concealment of insolvency.

Have evidence about Genesis Global Capital?

No evidence submitted yet — be the first.

On-chain audit

Editorial decisions, corrections, and updates are anchored on Solana.

audit log →version history →

Background and Business Operations

Genesis Global Trading, Inc. was founded in 2013 as the first institutional over-the-counter (OTC) bitcoin trading desk in the United States. It is a subsidiary of Digital Currency Group (DCG), a venture capital firm founded by Barry Silbert. Genesis expanded from trading into lending with the launch of Genesis Capital in March 2018. By the end of Q2 2019, outstanding loans had grown 149 percent quarter-over-quarter to $452 million. The lending business ultimately grew to handle billions in loans to institutional counterparties. In February 2021, Genesis partnered with Gemini Trust Company to power the 'Gemini Earn' program, which allowed approximately 340,000 retail users to lend digital assets to Genesis at interest rates as high as 8 percent. At its peak, Genesis held approximately $900 million in Gemini Earn assets.

Sources

Three Arrows Capital Exposure

In June 2022, it was reported that Genesis faced hundreds of millions in losses from its exposure to Three Arrows Capital (3AC), one of its largest borrowers. Genesis Asia Pacific Pte. Ltd. had extended roughly $2.36 billion in loans to Three Arrows Capital on an undercollateralized basis. When Three Arrows Capital failed to meet a margin call in 2022, it triggered a massive default and left a significant gap in Genesis's balance sheet. Genesis Global Trading filed a $1.2 billion claim against Three Arrows Capital. Digital Currency Group subsequently assumed the full $1.2 billion claim from Genesis, replacing it with a $1.1 billion promissory note payable over ten years at a one percent interest rate. Allegations later emerged that this arrangement was used to conceal the true extent of Genesis's losses: DCG and Genesis allegedly characterized this long-dated, low-interest promissory note as a current asset on Genesis's balance sheet, misleading creditors and counterparties about the company's financial health. Genesis also allegedly publicly stated its balance sheet was strong just two days after the Three Arrows Capital default.

Sources

FTX Collapse and Withdrawal Suspension

Following the collapse of FTX in November 2022, Genesis disclosed it had approximately $175 million in locked funds in its FTX trading account and approximately $37 million in loans to Alameda Research, with an estimated $7 million net loss on the Alameda positions. On November 11, 2022, DCG provided a $140 million equity infusion into Genesis. On November 16, 2022, Genesis announced it was suspending customer withdrawals and new loan originations, citing 'extreme market dislocation and loss of industry confidence' caused by the FTX collapse. The withdrawal suspension simultaneously halted the Gemini Earn program, freezing approximately $900 million belonging to approximately 340,000 retail users of that product.

Sources

Chapter 11 Bankruptcy Filing

On January 19, 2023, Genesis Global Holdco, LLC, Genesis Global Capital, LLC, and Genesis Asia Pacific Pte. Ltd. filed voluntary Chapter 11 petitions in the U.S. Bankruptcy Court for the Southern District of New York. At the time of filing, Genesis owed at least $3.4 billion to creditors. The filing came approximately two months after the company suspended withdrawals. Genesis Global Trading, Inc. (the OTC trading arm) was not included in the bankruptcy filing. The largest unsecured creditor group included users of the Gemini Earn program, represented in part by the New York Attorney General.

Sources

SEC Charges and $21 Million Settlement

On January 12, 2023 — one week before the bankruptcy filing — the Securities and Exchange Commission charged Genesis Global Capital and Gemini Trust Company with violating Sections 5(a) and 5(c) of the Securities Act of 1933 by offering and selling unregistered securities through the Gemini Earn lending program. Genesis agreed to pay a $21 million civil penalty to settle the charges. The settlement was approved by the bankruptcy court judge in March 2024. Under the settlement terms, payment of the SEC penalty was subordinated to the payment of all allowed claims by the bankruptcy court, meaning creditors would be paid first.

Sources

New York Attorney General $2 Billion Settlement

In October 2023, New York Attorney General Letitia James sued Gemini, Genesis, and DCG, alleging they defrauded investors of more than $1 billion through the Gemini Earn program and that Genesis and DCG concealed the company's financial losses. The NYAG alleged that Genesis and DCG executives, including Michael Moro (former Genesis CEO) and Barry Silbert, knew of the massive losses from Three Arrows Capital and took steps to hide them from investors and counterparties. On May 20, 2024, the NYAG announced a settlement worth up to $2 billion with Genesis Global Capital, Genesis Asia Pacific, and Genesis Global Holdco. The settlement established a Victims' Fund intended to provide recoveries for defrauded investors, including at least 29,000 New Yorkers who contributed more than $1.1 billion through Gemini Earn. As part of the settlement, Genesis is permanently banned from operating in New York. The bankruptcy court approved the settlement on May 21, 2024. The NYAG described it as the largest settlement ever secured against a cryptocurrency company in New York state history.

Sources

Creditor Restructuring and $4 Billion Distribution

The U.S. Bankruptcy Court for the Southern District of New York confirmed Genesis's Chapter 11 restructuring plan on May 21, 2024. Genesis completed its restructuring on August 2, 2024 and commenced approximately $4 billion in distributions of digital assets and U.S. dollars to creditors. Average recoveries varied significantly by asset class: Bitcoin creditors received approximately 51.28 percent of their claims on an in-kind basis; Ethereum creditors received approximately 65.87 percent; Solana creditors received approximately 29.58 percent; stablecoin and U.S. dollar creditors received 100 percent of their claims. Key settlements incorporated into the plan included a $175 million settlement with FTX's estate, a $33 million settlement with Three Arrows Capital, a $2.2 billion settlement with Gemini, the $21 million SEC penalty, and the $2 billion NYAG settlement. A $70 million litigation fund was established as part of the plan to pursue ongoing legal actions against third parties, including DCG.

Sources

DCG and Barry Silbert: Role and Allegations

Digital Currency Group (DCG), founded by Barry Silbert, was the parent company of Genesis Global Capital. As DCG's CEO, Silbert exercised significant influence over Genesis's operations and strategy. After the Three Arrows Capital default in 2022, DCG assumed Genesis's $1.2 billion claim against 3AC and replaced it with the $1.1 billion, ten-year, one-percent-interest promissory note described above. The NYAG's 2023 lawsuit named Silbert and former Genesis CEO Michael Moro as defendants, alleging they actively concealed the extent of Genesis's losses. In May 2025, the Genesis Litigation Oversight Committee (LOC) filed two separate lawsuits alleging DCG and Silbert engaged in systematic fraud. The Delaware Court of Chancery complaint alleged DCG used Genesis as a financing vehicle for DCG's own interests — particularly benefiting Grayscale Investments, DCG's asset management subsidiary — through off-market loans and asset transfers, while concealing Genesis's insolvency from creditors. A second complaint in the U.S. Bankruptcy Court for the Southern District of New York alleged that DCG and its affiliates withdrew over $1.2 billion in U.S. dollars and cryptocurrencies in the year leading up to the Genesis bankruptcy, timed around major market shocks including the Terra-Luna collapse, the Three Arrows Capital default, and FTX's implosion. DCG denied all allegations, with a spokesperson characterizing the lawsuits as recycling 'tired, two-year old claims' and stating that 'DCG has always conducted its business lawfully and with integrity.'

Sources

$3.3 Billion Lawsuit Against DCG

On May 19, 2025, the Genesis Litigation Oversight Committee (LOC), represented by law firm Selendy Gay PLLC, filed two lawsuits seeking to recover a combined $3.3 billion from DCG, Barry Silbert, and a network of corporate insiders. The first complaint, filed in the Delaware Court of Chancery, sought approximately $2.2 billion and alleged that Silbert operated Genesis as a financing arm for DCG, engaging in self-serving loans and concealed transfers that drained value for the benefit of Grayscale Investments and other DCG affiliates. The complaint alleged Silbert and other insiders manipulated financial disclosures and orchestrated a misleading marketing campaign to falsely reassure creditors. The second complaint, filed in the U.S. Bankruptcy Court for the Southern District of New York, sought recovery of more than $1 billion in allegedly fraudulent transfers made while Genesis was insolvent. The LOC alleged that over one million digital coins — worth approximately $2.1 billion — were funneled out of Genesis to DCG and its insiders during the period leading up to the bankruptcy filing, timed to coincide with market stress events. Separately, DCG filed a counter-lawsuit against Genesis seeking repayment of the $1.1 billion promissory note. All of these litigation matters were ongoing as of the date of this report.

Sources

Timeline

2013-01-01

Genesis Global Trading founded as the first institutional OTC bitcoin trading desk in the United States.

Wikipedia

2018-03-01

Genesis Capital lending business launched.

CryptoSlate

2021-02-01

Genesis partners with Gemini to launch the Gemini Earn program, allowing retail users to lend crypto assets to Genesis at up to 8 percent interest.

CNBC

2022-06-29

Reports emerge that Genesis faces hundreds of millions in losses from exposure to Three Arrows Capital.

CoinDesk

2022-07-06

Genesis confirms Three Arrows Capital exposure and announces DCG assistance including assumption of $1.2 billion claim.

CoinDesk

2022-07-18

Genesis files $1.2 billion claim against Three Arrows Capital; DCG issues $1.1 billion promissory note to cover the shortfall.

CoinDesk

2022-11-11

DCG provides $140 million equity infusion into Genesis following FTX collapse.

Protos

2022-11-16

Genesis suspends customer withdrawals and new loan originations citing market dislocation from FTX collapse. Gemini Earn program simultaneously halted, freezing approximately $900 million belonging to around 340,000 users.

CoinDesk

2023-01-12

SEC charges Genesis Global Capital and Gemini Trust Company with violating the Securities Act of 1933 by offering unregistered securities through the Gemini Earn program.

CNBC

2023-01-19

Genesis Global Holdco, LLC, Genesis Global Capital, LLC, and Genesis Asia Pacific Pte. Ltd. file Chapter 11 bankruptcy in the Southern District of New York, listing at least $3.4 billion owed to creditors.

CoinDesk

2023-10-19

New York Attorney General Letitia James sues Gemini, Genesis, and DCG — including naming Barry Silbert and Michael Moro — for allegedly defrauding investors of more than $1 billion through Gemini Earn and concealing massive losses.

Fortune

2024-02-09

NYAG amends its complaint, expanding the sought damages to approximately $3 billion and adding additional allegations against Barry Silbert and DCG.

Fortune

2024-03-19

Bankruptcy court approves $21 million SEC settlement with Genesis.

Bloomberg

2024-05-20

New York Attorney General announces $2 billion settlement with Genesis entities to establish a Victims' Fund for defrauded investors. Genesis is permanently banned from operating in New York.

NY Attorney General

2024-05-21

U.S. Bankruptcy Court confirms Genesis's Chapter 11 restructuring plan.

CoinDesk

2024-08-02

Genesis completes restructuring and commences approximately $4 billion in distributions to creditors in digital assets and U.S. dollars.

Business Wire

2025-05-19

Genesis Litigation Oversight Committee files dual lawsuits in Delaware Chancery Court and the U.S. Bankruptcy Court for the Southern District of New York seeking $3.3 billion from DCG, Barry Silbert, and network of insiders for alleged fraud and fraudulent transfers.

CoinDesk

model: claude-code-investigator

generated: 5/8/2026, 2:31:31 AM

last updated: 5/8/2026, 2:42:01 AM

avoid.net — verified advice for a post-truth world