Find Why Genesis Wants $20.9 M from ‘Bitcoin Jesus’?

After the collapse of FTX in late 2022, Genesis’s crypto lending businesses filed for bankruptcy protection in New York last week. It reportedly suffered losses of several hundred million dollars due to its exposure to crypto hedge fund Three Arrows Capital.

Now a unit of Genesis Global claims blockchain-industry veteran and Bitcoin Cash (BCH) backer Roger Ver, sometimes referred to as “Bitcoin Jesus”, failed to settle cryptocurrency options trades. This allegation against Ver by GGC International Ltd. was contained in a January 23rd, 2023 filing to the New York State Supreme Court in Manhattan.

Genesis website states that GGC International is a British Virgin Islands company, wholly owned by Genesis Bermuda Holdco Limited. It carries out spot trading activity and hedges exposure with derivatives on digital assets. Genesis Bermuda Holdco Limited, in turn, is a unit of Genesis Global Holdco LLC, one of the entities included in last week’s bankruptcy filing, as a document presented in the case noted.

The filing states, GGC International seeks “money damages for the defendant’s failure to settle cryptocurrency options transactions that expired on December 30th, 2022, in an amount to be determined at trial but no less than $20.9 million.”

It must be noted that Ver did not immediately respond to requests for comment. Similarly, a Genesis press representative declined to comment.

Genesis received a high number and volume of calls on loans and faced a “run on the bank”. 

On November 16th, 2022, Genesis paused all withdrawals to preserve and maximize value of the estates, ensure fair distribution and stop the run on the bank. All lending and borrowing business of the Debtors (GGC and GAP) remains paused

The Governance Initiatives

Recognizing the conflicts between DCG (as GGC’s largest borrower) and Genesis, the Board of Directors of Genesis Global Holdco, LLC (“GGH”) formed a special committee (the “Special Committee”) on November 18th, 2022, comprised of two independent directors Paul Aronzon and Thomas Conheeney.

GGH’s Board fully delegated all matters involving the restructuring, including the decision to commence chapter 11 cases, to the Special Committee. Company’s advisors, including Cleary Gottlieb, Moelis & Company and Alvarez & Marsal, report directly to the Special Committee. The Special Committee has met frequently to discuss and evaluate matters within its purview. Meanwhile, in accordance with its fiduciary duties, the Special Committee has commenced an investigation into certain prepetition transactions involving Genesis, DCG and others.

Genesis will continue engaging in discussions with creditors and make revisions to the plan if agreements are reached. If agreements are not reached imminently, Genesis will request the appointment of a mediator.

Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.

Latest posts by Nancy J. Allen (see all)