Judge revises earlier February decision
According to The Block, U.S. District Judge Stefan Underhill in Connecticut has revived a New York common-law fraud claim against Barry Silbert, Digital Currency Group (DCG), and other defendants in the Genesis Yield class-action lawsuit. The latest ruling modifies an earlier decision issued by the court in February.
The plaintiffs argued that the court has authority to hear the relevant state-law claims under the Class Action Fairness Act, and the judge agreed with that position. In the complaint, plaintiffs allege that Silbert and DCG misled investors about Genesis’ financial condition and its risk-management practices before Genesis suspended withdrawals and later filed for bankruptcy in early 2023.
Federal securities claims continue as some state claims are paused or dismissed
Beyond the revived New York common-law fraud claim, the lawsuit’s federal securities law claims are still proceeding. That means a core part of the case remains active even as the court sorts through the viability of other state-level causes of action.
At the same time, consumer protection claims brought under the laws of California, Florida, and New York have been stayed. By contrast, consumer protection claims under Illinois, Kansas, Nevada, and Texas law have already been dismissed by the court.
The result is a mixed procedural outcome for the Genesis Yield class action: the case continues on revived fraud allegations and ongoing federal securities claims, while several state consumer protection theories have either been put on hold or removed from the case altogether.