Svmuu News: A judge in the U.S. District Court for the District of Connecticut has reinstated investors’ common law fraud claims against Digital Currency Group (DCG) founder Barry Silbert, DCG, and other defendants in the Genesis Yield lawsuit, while allowing the federal securities law claims in the case to proceed.
This ruling revises an earlier decision by the court in February of this year. The plaintiffs had previously argued that the court had jurisdiction to hear their state law claims under the Class Action Fairness Act. Judge Stefan Underhill accepted this argument and reinstated the relevant state law claims.
The case centers on the now-defunct Genesis Yield lending program, which once allowed users to deposit crypto assets and earn interest. Investors allege that Silbert, DCG, and other defendants misled customers despite being fully aware of the company’s financial health issues and risk control deficiencies prior to Genesis suspending withdrawals and filing for bankruptcy in early 2023.
However, not all state law claims were reinstated. The court dismissed consumer protection claims from four states and stayed claims from three others. Overall, the ruling has refocused the case on the dispute over fraud liability against DCG and Silbert. (The Block)