- Recent news surrounding the Genesis bankruptcy deal could bring good days in ongoing crypto winter.
- The failed crypto lender filed for bankruptcy in January 2023, after being affected by the events of 2022.
- The FTX contagion spread in the industry, amid which problems of DCG’s failed arm may resolve all the legal issues till first half this year.
Now-bust crypto lender Genesis Global Holdco filed for bankruptcy in late January 2023.
This means that some of the Genesis’ investors might get their money back. At the time of writing, Bitcoin (BTC) was trading at $23,202.20, according to data from CoinMarketCap. That the BTC price has been rising since the year began suggests the crypto winter may be ending soon.
Genesis, a subsidiary of Digital Currency Group (DCG), was dealing with blows from Three Arrow Capital’s collapse. The failed crypto lender listed nearly 100,000 creditors, with total liabilities between $1.2 billion to $11 billion, as per the legal documents.
Loan payable to crypto exchange Gemini of $756.9 million is listed in Genesis’ bankruptcy filing. Other creditors include Donut with ($78 million), and VanEck fund, with over $53.1 million, noted CNBC.
Before filing for Chapter 11 bankruptcy, the cryptocurrency lender was in the news because of “confidential negotiations” that it was involved in liquidity issiues, per Bloomberg.
According to a news website, Genesis’ lawyer, Sean O’Neal addressed the U.S. States Bankruptcy court of Southern District of New York (SDNY), at the initial hearing on January 23, 2022. He said that the firm is confident that it will settle creditors’ disputes by the end of the week, and that it could pull itself from bankruptcy proceedings in four months.
According to a press release, Gemini will offer $100 million to its Earn clients. Earlier, it spiraled into the public struggle of the Gemini Earn program, which captivated crypto users to yield 0.45% to 8% interest, finally closed by Genesis and Gemini.
DCG owes over $1.65 billion including $575 million of loan payable till May 2023.
DCG founder Barry Silbert and Gemini co-founder Cameron Winklevoss were at a war of words on Twitter after the later accused the former of not addressing and cooperating with the victims of Gemini’s Earn program. Gemini through its Earn program had significant exposure to Genesis.
Source: https://www.thecoinrepublic.com/2023/02/08/does-genesis-bankruptcy-deal-benefit-the-crypto-sector/