DCG Wants To Consolidate Class Actions To Avoid Judgment Conflict

Key Points:

• DCG and its CEO Barry Silbert have asked to merge two class action lawsuits against them.
• The company said the two cases involved the same facts, had overlapping legal issues, and raised nearly identical class definitions.
• It also said combining the cases was to avoid conflicting judgments and to promote judicial efficiency.

Digital Currency Group (DCG) and its CEO, Barry Silbert, have moved to combine two class action lawsuits filed against them.

In a letter to Connecticut U.S. District Judge Stefan Underhill, the DCG said that the two lawsuits contained the same facts, overlapping legal difficulties, and almost similar class designations. The DCG further said that the cases were being combined to prevent contradictory judgments and to increase judicial efficiency.

In addition, the defendants conclude that merging the cases is required to minimize disputes and increase court efficiency. The defendants alerted Underhill in the letter that they had requested U.S. District Judge Lewis Liman to relocate the lawsuit from New York to Connecticut, a move the Connecticut plaintiffs opposed.

The Connecticut complaint claims that Silbert arranged a deceptive arrangement to conceal symptoms of a $1.1 billion collapse after Three Arrows went into bankruptcy. DCG faces securities fraud accusations after making misleading or deceptive representations.

For 30 days, Genesis, a subsidiary of Digital Currency Group, and crypto exchange Gemini Trust, were in court-ordered mediation negotiations. The parties had already reached an agreement in February, but it was never formalized. DCG said in mid-May that it had failed to make a $630 million payment to Gemini due the week of May 9.

Genesis Global Holdco, a bankrupt cryptocurrency lender, has requested that court-ordered mediation discussions with its creditors be prolonged. Genesis has suggested that the mediation term be extended to the end of June 16.

Genesis and the Gemini exchange are now requesting a US court to dismiss a Securities and Exchange Commission (SEC) complaint claiming that the two companies marketed unregistered securities. The SEC’s focus in action filed in a New York court in January, according to the SEC, was the product for which Gemini was lucrative, an unregistered service. According to the agency, the two businesses generated billions of dollars in crypto assets from hundreds of thousands of investors.

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Harold

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