U.S. Judge Reinstates Fraud Claims Against Barry Silbert and DCG in Genesis Yield Suit

A federal judge in Connecticut has reinstated investors' common-law fraud claims against Barry Silbert, Digital Currency Group (DCG) and other defendants in litigation tied to the Genesis Yield program, while also allowing the case's federal securities claims to move forward. The ruling, issued July 7 (UTC+8) and cited by ME News, modifies the court's earlier decision from February. Plaintiffs argued the court has jurisdiction over their state-law claims under the Class Action Fairness Act, an argument accepted by Judge Stefan Underhill, who restored the relevant claims. The lawsuit focuses on the collapse of Genesis Yield, a lending product that let users deposit crypto assets to earn interest. Investors allege Silbert, DCG and others misled customers despite knowing Genesis faced financial instability and lacked adequate risk controls before halting withdrawals and filing for bankruptcy in early 2023. Not all state-law claims were revived. The court dismissed consumer-protection claims from four states and stayed claims from three others. The decision narrows the dispute to whether DCG and Silbert bear liability for fraud. (Source: ChainCatcher)