Digital Currency Group (DCG) has initiated legal action against its subsidiaries Genesis Global Capital and Genesis Asia Pacific regarding a $1.1 billion promissory note tied to financial relations associated with the bankruptcy of Three Arrows Capital (3AC).
Nature of DCG's Lawsuit Against Genesis
On August 15, 2025, DCG filed a complaint in the US Bankruptcy Court for the Southern District of New York. The lawsuit alleges that Genesis Global Capital and Genesis Asia Pacific owe their parent firm payments based on recoveries received from 3AC.
DCG asserts that instead of suffering losses, Genesis gained substantial profits and should refund payments received under the promissory note issued in June 2022.
Legal Consequences of 3AC's Collapse
This lawsuit adds to a series of legal disputes following the 3AC collapse. Earlier, Genesis filed lawsuits against DCG and key executives, including CEO Barry Silbert, citing allegations of fraud and concealed fund transfers. They claimed over $3.3 billion related to pre-bankruptcy withdrawals by DCG.
Genesis' counsel, Luke Barefoot, stated that DCG’s claims lack merit and contradict existing agreements and prior court representations.
Overall Volatility of the Crypto Market
The collapse of 3AC triggered widespread turmoil across the crypto market, contributing to multiple bankruptcies and losses among investors. The filing also discusses the broader fallout from the November 2022 bankruptcy of major crypto exchange FTX, which further destabilized the market.
Despite limited direct credit exposure to FTX, Genesis Global Capital ultimately filed for bankruptcy in January 2023 due to liquidity pressures prompted by the market crash.
This saga reflects the complex and interconnected nature of the crypto industry’s legal and financial challenges following the 2022 market turmoil.
