HomeNewsThe Crypto Community's New Villain: Barry Silbert Faces Fraud Allegations, Igniting Debate...

The Crypto Community’s New Villain: Barry Silbert Faces Fraud Allegations, Igniting Debate Over Fund Ownership

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  • Investors are outraged about Barry Silbert’s possible profit from Genesis’s bankruptcy via dubious legal maneuvers.
  • Debates over the equitable treatment of digital assets in bankruptcy proceedings may have a big influence on investor reparations.

CEO Barry Silbert is involved in a contentious position that could potentially net him a billion dollars or more in the midst of Genesis, DCG’s cryptocurrency lending business, filing for bankruptcy. New York Magazine was the first to report on this.

This dispute has emerged in the wake of Genesis’s spectacular collapse, which has placed a large number of investors in financial ruin.

The Fall of Genesis: Signs of a Deeper Crisis

The cryptocurrency community was surprised on January 18, 2023, when Genesis declared bankruptcy, as previously reported by ETHNews. Notably, Eric Asquith, who lost almost $1 million of his family’s money in the collapse, illustrates the damage to individual investors.

Because GUSD offered high returns, it attracted Asquith and other investors. However, these investors were not aware that Silbert was using their money to fund high-risk projects, which could have resulted in significant losses.

Contentious Strategies: An explanation of “The Barry Trade”

There have been rumors circulating about Silbert that link him to a plan called “the Barry Trade,” in which bankruptcy regulations are used to reduce investor rewards. Because of this tactic, Silbert has drawn a lot of criticism and established himself as a contentious figure in the cryptocurrency world.

For those impacted, there is a ray of optimism, though. Encouraged by a reviving cryptocurrency market, Gemini and Genesis struck a settlement in February that provided $1.8 billion to the affected users, a sizable step in the right direction toward making up for the financial devastation caused by the crypto collapses.

The legal dispute surrounding Silbert’s strategy, which supports a particular interpretation of bankruptcy law to profit from falling asset prices, has sparked a heated debate.

This conflict was fought out in court on March 18, when Silbert’s position on how digital assets should be fairly valued in bankruptcy proceedings was contested by creditors and attorneys.

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Syofri is an active forex and crypto trader who has been diligently writing the latest news related to the digital asset sector for the past six years. He enjoys maintaining a balance between investing, playing music, and observing how the world evolves. Business Email: info@ethnews.com Phone: +49 160 92211628