Crypto mogul Barry Silbert faces lingering lawsuits tied to Genesis even as he prepares for the landmark Grayscale public listing.
And once again, the billionaire, Barry Silbert, is at the centre of the crypto spotlight. As the founder of Digital Currency Group (DCG) works to bring Grayscale, its $33 billion asset manager, to public markets, unresolved legal battles from the 2022 crypto crash still cast a long shadow.
Legal clouds ahead of a landmark IPO
The much-anticipated Grayscale IPO could mark a milestone for mainstream adoption of crypto investing in the U.S. But critics argue that Silbert has yet to fully address the fallout from Genesis, DCG’s lending arm that collapsed in early 2023 after heavy losses tied to Three Arrows Capital and Sam Bankman-Fried’s Alameda Research.
Genesis’s bankruptcy triggered lawsuits that accuse Barry Silbert and DCG executives of misleading creditors and attempting to shield the company’s finances while the lender spiraled toward insolvency. The Winklevoss twins, founders of the Gemini exchange and once close partners of Silbert, have been among his fiercest critics. Tyler Winklevoss has said Silbert’s actions in 2022 “eroded trust across the entire digital asset ecosystem.”
Creditors push for accountability
Although some Genesis creditors were eventually repaid through settlements and bankruptcy proceedings, others remain unsatisfied. Earlier this year, a court-approved litigation committee representing creditors filed a new lawsuit targeting Silbert personally. The committee alleges that DCG insiders knew of Genesis’s vulnerabilities as early as 2021 and took steps to protect themselves while leaving ordinary investors exposed.
Emails cited in the complaint suggest that DCG executives privately debated whether Genesis’s failure could harm the parent company long before its collapse became public. The suit also points to a $1.1 billion promissory note and several Ethereum transactions that allegedly inflated Genesis’s balance sheet in a bid to reassure stakeholders.
Silbert and DCG have denied any wrongdoing, insisting they worked to stabilize Genesis during an unprecedented market crash. In August, DCG filed a motion to dismiss the litigation committee’s claims, framing the lawsuit as an unfair attempt to rewrite history.
Investor confidence vs. industry skepticism
Despite the legal noise, Barry Silbert has not slowed his push to restore DCG’s standing. Grayscale announced this summer that Silbert would return as chair of its board after stepping down in 2023. Analysts argue that the Grayscale IPO could signal strong institutional appetite for crypto-linked equities and reshape the market’s perception of Silbert’s legacy.
Industry voices remain divided. Some former employees argue that Silbert should have foreseen Genesis’s collapse and acted sooner. Others say his efforts to save the company reflected the chaotic reality of the crypto crash, when several high-profile lenders and exchanges went under in quick succession.
A test of trust in U.S. crypto markets
For investors, the coming months will be a litmus test: can Barry Silbert distance himself from the controversies of Genesis and deliver a successful Grayscale IPO? Supporters see it as a chance to prove that crypto asset management can thrive in U.S. public markets. Critics, however, warn that the lawsuits may keep resurfacing until courts deliver final judgements.
What is clear is that Silbert’s next move will carry weight far beyond DCG. The Barry Silbert story is no longer just about one billionaire’s reputation; it is a case study in whether trust in crypto’s leaders can be rebuilt after one of the industry’s darkest chapters.
