Federal Judge Allows Silver Golub & Teitell Cryptocurrency Class Action Against DCG to Proceed

February 25, 2026

U.S. District Judge Stefan Underhill has denied Digital Currency Group's motion to dismiss the core claims in a proposed securities class action, a major win for the plaintiffs that allows federal securities law claims to move forward against DCG and its founder, Barry Silbert.

Judge Underhill found that the plaintiffs − cryptocurrency lenders who allege they were defrauded when DCG concealed the insolvency of its subsidiary Genesis Global Capital − have adequately pleaded violations of both the Securities Act of 1933 and the Securities Exchange Act of 1934. The court found the Genesis Yield lending program constituted a security under both the Howey and Reves tests, rejecting DCG's argument that the program was merely a "run-of-the-mill loan." The court also found that the complaint sufficiently alleged material misrepresentations regarding Genesis's risk management practices and solvency, and that each named defendant acted knowingly.

The ruling also lifted a discovery stay granted under the Private Securities Litigation Reform Act (PSLRA), allowing the plaintiffs to begin obtaining evidence.

The court dismissed without prejudice state consumer protection and common law fraud claims, finding that they overlapped with the federal securities claims and could delay the litigation.

Silver Golub & Teitell represents the plaintiffs alongside co-counsel Kaplan Fox & Kilsheimer LLP.

Media contact: mediarequests@sgtlaw.com