US Judge Reinstates Fraud Claims Against Barry Silbert and DCG

Odaily Planet Daily News A federal judge in the District of Connecticut has reinstated common law fraud claims against Digital Currency Group founder Barry Silbert, DCG, and other defendants in the Genesis Yield lawsuit, while allowing federal securities law claims in the case to proceed.

The ruling revises an earlier decision by the court in February of this year. The plaintiffs had argued that the court had jurisdiction to hear their state law claims under the Class Action Fairness Act. Judge Stefan Underhill accepted this argument and allowed the related state law claims to be reheard.

The case centers around the failed Genesis Yield lending program, which allowed users to deposit crypto assets and earn interest. Investors allege that Silbert, DCG, and other defendants misled clients about the company's financial health and risk controls, even as they were aware of existing problems, prior to Genesis suspending withdrawals and filing for bankruptcy in early 2023.

However, not all state law claims were reinstated. The court dismissed consumer protection-related claims from four states and stayed similar claims from three other states. Overall, the ruling refocuses the case on the dispute over fraud liability involving DCG and Silbert. (The Block)