Silver Golub & Teitell LLP files Securities Class Action Lawsuit Against Digital Currency Group, Inc. and Barry Silbert on behalf of individuals and entities who entered into digital asset lending agreements with Genesis Global Capital, LLC.
STAMFORD, Conn., Jan 23, 2023 /PRNewswire/ — Silver Golub & Teitell LLP (“SGT”), a plaintiffs’ law firm based in Stamford, Connecticut has filed a securities class action against Digital Currency Group, Inc. (“DCG”) and DCG founder and chief executive officer Barry Silbert (“Silver”) in the United States District Court for the District of Connecticut alleging violations of the federal securities laws. SGT’s clients seek to represent two putative classes of individuals and entities who loaned digital assets pursuant to lending agreements to DCG’s wholly owned subsidiary Genesis Global Capital, LLC February 2, 2021 through November 16, 2022 (the “Class Period”).
On November 16, 2022Genesis Global Capital announced it would no longer honor redemption requests from lenders who loaned Genesis Global Capital digital assets due to what Barry Silbert called “an issue of liquidity and duration mismatch in the Genesis loan book.” On January 19, 2023Genesis Global Capital and two related entities filed for Chapter 11 bankruptcy protection.
The complaint seeks to hold DCG and Silbert liable as “Control Person(s)” pursuant to the federal securities laws.
Digital Currency Group is a Stamford, Connecticut-based corporation that serves as the parent company of a conglomerate of digital asset and blockchain technology focused subsidiaries, including Genesis Global Capital. Barry Silbert founded Digital Currency Group in 2015 and maintains a controlling 40% equity interest in DCG. Silbert currently serves as DCG’s chief executive officer and chairman of its board of directors.
SGT’s clients’ complaint (the “Complaint”) seeks to hold DCG and Silbert liable in their capacity as “Control Person(s)” pursuant to Section 15 of the Securities Act of 1933, 15 USC § 77a (the “Securities Act”) and Section 20 of the Securities Exchange Act of 1934, 15 USC § 78a et seq (the “Exchange Act”) for Genesis Global Capital’s alleged violations of the federal securities laws.
The Complaint alleges that Genesis Global Capital engaged in an unregistered securities offering in violation of Section 5 of the Securities Act by executing lending agreements with SGT’s clients and members of the putative classes that fit the definition of securities without qualifying for an exemption from registration under the federal securities laws.
The Complaint also alleges that Genesis Global committed securities fraud through a scheme to defraud prospective and current digital asset lenders by making false and misleading statement that intentionally misrepresented the financial condition of Genesis Global Capital in violation of Section 10(b) of the Exchange Act and SEC rule 10b-5 promulgated thereunder. The scheme to defraud was carried out, according to the Complaint, in order to induce prospective digital asset lenders to loan digital assets to Genesis Global Capital and to prevent existing lenders from redeeming their digital assets.
If you wish to serve as Lead Plaintiff for the Classes, you must file a motion with the Court no later than 60 days from the date of publication of this notice. Any member of the proposed Classes may move to serve as the Lead Plaintiff through counsel of their choice.
You may obtain additional information about this lawsuit and your ability to become a Lead Plaintiff by contacting SGT Partner Ian W. Sloss at [email protected] or by telephone at (203) 325-4491. The Action is titled McGreevy, et al. v. Digital Currency Group, et al., no. 23-cv-00082 (D. Conn.).
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SOURCE Silver Golub & Teitell LLP