DCG requests class-action suit consolidation for fair and consistent results

TL;DR Breakdown

  • DCG and its CEO, Barry Silbert, have requested that two class action lawsuits filed against them be consolidated.
  • According to the firm, the two instances contained the same facts, had overlapping legal concerns, and presented nearly identical class classifications.
  • It further stated that grouping the cases was done to avoid contradictory judgments and to increase court efficiency.

DCG, a prominent corporation facing various class-action lawsuits, has asked a judge to consolidate these cases to expedite the legal process and ensure consistent outcomes. In corporate litigation, class-action lawsuits allow people with comparable claims against a firm to join forces and seek justice. 

However, when many class-action suits are filed against a single defendant, separate courts might make inconsistent decisions, causing confusion and inefficiency. 

Two class action claims against DCG and its CEO Barry Silbert are merged

Digital Currency Group (DCG), an investment firm, and its chief executive officer, Barry Silbert, have sought to combine two class action lawsuits alleging losses during the crypto winter.

Two different class action lawsuits have been filed against DCG, a well-known venture capital company in the digital asset space. The first case is about claims that investors were tricked by false statements and omissions about how to invest in cryptos.

The second lawsuit concerns whether DCG broke securities rules when it made its initial coin offering (ICO). If these cases had been taken on separately, they could have caused the company a lot of legal and financial trouble.

In a letter to US District Judge Stefan Underhill in Connecticut, the DCG argued that the two cases shared factual and legal similarities and nearly identical class designations. The DCG added that the cases were consolidated to avoid inconsistent rulings and streamline the judicial process.

The defendants have also concluded that merging the cases is necessary to reduce the number of conflicts and maximize the effectiveness of the courts. The defendants informed Underhill in the letter that they had asked US District Judge Lewis Liman to transfer the case from New York to Connecticut, notwithstanding the opposition of the plaintiffs in Connecticut.

After Three Arrows filed for bankruptcy in Connecticut, the complaint alleges that Silbert engineered a fraudulent arrangement to hide signs of a $1.1 billion collapse. DCG is accused of securities fraud for allegedly making false or misleading statements to investors.

The crypto exchange Gemini Trust and the DCG subsidiary Genesis participated in mediation for 30 days. The parties reached a tentative agreement in February, but it was never formally recorded. DCG announced around the middle of the month that it had yet to pay the $630 million to Gemini by the end of the week of May 9.

DCG legal team appeals to a federal judge

The bankruptcy court has been asked to extend the bitcoin lender Genesis Global Holdco’s mediation talks with its creditors. Genesis has proposed extending the time allotted for mediation until the end of June 16.

The SEC has filed a complaint against Genesis and the Gemini exchange, alleging that the two entities sold unregistered securities. Genesis and the Gemini exchange have filed a motion asking a US court to dismiss the SEC’s complaint.

According to the SEC’s January case in New York court, Gemini’s most profitable offering was an unregistered service. The agency claims hundreds of thousands of investors contributed to the billions of dollars in crypto assets generated by the two companies.

The fact that DCG CEO Barry Silbert merged two class action lawsuits against the company shows how aggressive he is as a leader and how much he wants to solve legal problems quickly. 

By putting all the legal actions in one place, DCG can speed up finding a solution, cut costs, and show a united defense strategy. This strategic move helps the company, but it could also help the claimants by speeding up the resolution and making it easier to discuss a settlement. Both the digital asset business and the legal community will be paying close attention to the outcome of this groundbreaking event.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decision.
Florence Muchai

Florence Muchai

Florence is a crypto enthusiast and writer who loves to travel. As a digital nomad, she explores the transformative power of blockchain technology. Her writing reflects the limitless possibilities for humanity to connect and grow.