US Judge Reinstates Fraud Claims Against Barry Silbert and DCG

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

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

The case revolves 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 customers, knowing that the company had financial health and risk control issues, before Genesis suspended withdrawals and filed 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 related claims from three others. Overall, the ruling refocuses the case on the dispute over fraud liability against DCG and Silbert. (The Block)