A newly non -sealed complaint of the Cryptographic Lender in bankruptcy Genesis reveals internal communications in his parent company, Digital Currency Group (DCG), the suggested leaders were aware of the financial mismanagement and the imminent legal risks linked to their control over Genesis.
According to the deposit of the DELAware Chancellery Court, the DCG financial director Michael Kraines recognized the risk that Genesis could be considered as the “alter ego” of DCG.
In a confidential note shared with the former CEO of Genesis Michael Moro and others, Kraines has set up a “war exercise” preparing legal arguments that a future applicant could raise if Genesis collapsed. The memo, attached to the complaint, reflects the now central claims of the trial.
“The question in my mind is simply saying is” if Genesis should somehow explode could somehow reserve DCG in the depths of its board of directors and shareholders? “My reflection pre-prefers here is the following,” Kraines wrote to Moro, indicating that they were preparing for imminent legal impact.
In relation: The CEO of Digital Currency Group, Barry Silbert, says that he should have kept BTC
DCG ignored risk warnings
The deposit also reveals that DCG hired third -party risk consultants who have issued warnings that have been ignored or acted too late. Internal documents show that DCG admitted that Genesis was “blind” as his balloon book from 4 billion to 12 billion dollars.
External auditors had already pointed out “important gaps and material weaknesses” in the financial checks of Genesis from 2020.
A so -called “contagion” risk committee was trained in Genesis to alleviate exposure. However, his first meeting only took place nine months after the approval of the DCG board of directors. Kraines would have joked by saying that the delay “has just made my future deposit a little easier.”
The complaint also describes a toxic workplace in the workplace where the employees of Genesis had to serve the interests of DCG to the detriment of good governance.
An initiate wrote that DCG kept Genesis alive “So [it] could plunder the assessment … accessory [Genesis] above, give [the] printing[,] Then borrow while they c[ould] To withdraw the money. Genesis staff have qualified the company’s environment internally as a “submission culture”.
“These are not technical disputes on intersocated accounting,” said the Genesis litigation monitoring committee. “The complaint of Delaware exhibits a deliberate scheme by DCG and Barry Silbert with Pillage Genesis during its collapse.”
Cointelegraph contacted DCG to comment but had not received an answer by publication.
In relation: Genesis cryptographic society ends the restructuring
Public deception and controversial transactions
The file also alleges public deception. He claims that Genesis staff were invited to recite scripted messages after the capital of the three arrows (3AC), while DCG leaders, including Barry Silbert, have retweeted publications that minimized the crisis.
In addition, the complaint highlights two controversial transactions. These include the note to the order of June 30, 2022 and the “round trip” agreement of September 2022, both supervised as attempts to hide insolvency and the creditors induced.
Genesis seeks to recover more than $ 3.3 billion DCG, Silbert and other initiates.
Review: MaplesTory apologizes for cheaters, Tokyo Beast explodes in Japan, FIFA Rivals: Web3 Gamer
