Crypto billionaire accused of defrauding creditors, propelling industry's 2022 collapse

Creditors allege Barry Silbert ran his companies with lax controls and misstated the depth of financial problems

- Kevin T. Dugan

Creditors' lawsuits allege the crypto winter began earlier than believed, and with actions by Digital Currency Group's founder, Barry Silbert.

In the depths of the brutal 2022 meltdown in the digital-assets market, billionaire crypto entrepreneur Barry Silbert had a message for investors like Mark Cuban who were worried about getting wiped out: Stay calm, your money is safe, we're solid. His own actions didn't show the same confidence, according to new filings in lawsuits filed by creditors of Silbert's now-bankrupt lending business, Genesis Capital.

That April, Silbert demanded repayment of more than $100 million in loans that he and the companies he controlled had made to Genesis, according to the creditors, who are alleging a wide-ranging fraud. The calls started one day after Silbert received a dire warning of a "market crash" from consulting firm Oliver Wyman, they allege.

Silbert was one of the crypto market's first moguls. Founded in 2015, his Digital Currency Group built a large venture-capital portfolio, launched an asset manager that oversaw crypto funds (Grayscale Investments) and, through Genesis, lent to other investors.

Creditors allege that Silbert ran his companies with lax controls and misrepresented the depth of their financial problems so he could personally profit. They also said Silbert, his closest executives, and his brother Alan withdrew millions of dollars in loans while telling investors to keep their money on the platform. His actions, they argued, led to Genesis's failure.