Genesis Seeks $3.2 Billion From DCG Over Alleged Fraud Kraken Launches Regulated Crypto Derivatives in Europe South Korea Tightens KYC Rules Ahead of Institutional Crypto Investment

Crypto lender Genesis has initiated legal action against its parent company, Digital Currency Group (DCG), and its CEO Barry Silbert. The lawsuits allege that billions of dollars were drained from the platform while the impending collapse was concealed from customers. Genesis is seeking to recover a total of $3.2 billion, with one lawsuit targeting $2.2 billion in alleged fraudulent transfers and another seeking over $1 billion that was allegedly withdrawn to repay insiders in the year leading up to Genesis’ Chapter 11 filing. The suits claim that Silbert and other DCG executives exploited their insider knowledge to pull their funds from Genesis while it was insolvent, leaving users short on billions worth of bitcoin, ether, and other tokens. Genesis and its creditors argue that the executives engaged in a “campaign of fraud and self-dealing.” DCG has dismissed the lawsuits as “baseless” and “opportunistic,” asserting that the company had acted in good faith throughout the Genesis bankruptcy negotiations and vowing to fight the claims in court.

Kraken has launched regulated crypto derivatives trading for users across the European Economic Area, bringing established futures products under the European Union’s financial rulebook, MiFID II. The crypto exchange said that its perpetual and fixed maturity futures contracts, some of which already see significant daily volume, are now available to both retail and institutional traders in the region. This rollout follows Kraken’s acquisition of Cyprus-based investment firm Greenfield Wealth earlier this year, which secured a license from the Cyprus Securities and Exchange Commission (CySEC), allowing Kraken to meet regulatory requirements for offering derivatives in the EU.

South Korea is implementing stricter anti-money laundering rules as it prepares to ease its long-standing ban on institutional crypto investment. The country’s top financial regulator, the Financial Services Commission (FSC), announced that banks and crypto exchanges must apply stricter know-your-customer (KYC) checks on new institutional clients. These rules will require firms to verify the source of funds and the intended purpose of transactions in detail. The updated compliance measures coincide with a policy shift set to begin in June, allowing registered crypto exchanges in South Korea to sell user fees collected in digital assets and certain non-profit organizations to liquidate donated crypto.

In summary, the crypto landscape is witnessing significant legal and regulatory developments. Genesis' lawsuits against DCG and its CEO highlight the ongoing fallout from the crypto lender's collapse, with allegations of fraud and self-dealing at the heart of the dispute. Meanwhile, Kraken's launch of regulated crypto derivatives trading in Europe underscores the growing acceptance of digital assets within established financial frameworks. South Korea's tightening of KYC rules ahead of easing its institutional investment ban reflects a broader trend of increased regulatory scrutiny in the crypto space, as authorities seek to balance innovation with the need to prevent financial crimes.