Federal Judge Revives Fraud Claim Against Barry Silbert, DCG in Genesis Yield Case

According to a U.S. District Court for the District of Connecticut ruling filed last Thursday (July 3), a federal judge revived a New York common law fraud claim against Barry Silbert, Digital Currency Group (DCG), and other defendants in an investor lawsuit tied to Genesis Yield, the crypto lending program that suspended withdrawals and filed for bankruptcy in early 2023.

The revival of the fraud claim gives plaintiffs an additional legal path beyond the federal securities claims already allowed to proceed in February. Investors allege that Silbert and DCG knowingly misled customers about Genesis' financial condition and risk controls before the collapse. The ruling simultaneously dismissed or stayed consumer protection claims from other states including California, Florida, Illinois, Kansas, Nevada, and Texas, narrowing the case's scope while keeping disclosure-based liability claims active.