Genesis lawsuit alleges DCG ‘alter ego’ scheme, ignored warnings

A newly unsealed complaint reveals DCG executives anticipated legal fallout and ignored risk warnings as Genesis spiraled toward collapse.

A newly unsealed complaint from bankrupt crypto lender Genesis reveals internal communications at its parent company, Digital Currency Group (DCG), suggested executives were aware of financial mismanagement and looming legal risks tied to their control over Genesis.

According to the Delaware Court of Chancery filing, DCG’s chief financial officer, Michael Kraines, acknowledged the risk that Genesis could be deemed DCG’s “alter ego.”

In a confidential memo shared with former Genesis CEO Michael Moro and others, Kraines laid out a “war-gaming exercise” preparing for legal arguments a future plaintiff might raise if Genesis collapsed. The memo, attached to the complaint, mirrors claims now central to the lawsuit.

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