Crypto

Genesis’ crypto lending unit filed for bankruptcy

01/22/2023
Bitcoin Ethereum News
  • Genesis, a crypto lending firm filed for bankruptcy protection on January 19.
  • The company has owed almost $3.4 billion to creditors after being pitched by a market flight as well as FTX along with BlockFi. 

The company had put a stay on withdrawals on November 16 after the major exchange FTX filed for bankruptcy. The bankruptcy filing is clearly the newest crypto failure by a market downturn that mopped almost $1.3 trillion from the worth of crypto tokens in 2022. At the time when bitcoin has revived already this year, the market downturn has kept repeating in the most interconnected area. 

The company has filed bankruptcy to the Bankruptcy court of the United States for the Southern District of New York which calculated that it has over 100,000 creditors, that its assets were almost $5.3 billion, and debts, having intercompany accountabilities, were of about $5.1 billion as reported on November 30. 

The company’s plan

Genesis made a plan to overcome the bankruptcy by May 19, as per the court filings. It will attempt to sell its assets at an auction in the coming three months to give the money back to the creditors, as per the court filings. 

The parent company of Genesis Global Capital, Genesis Global Holdco as well as Genesis Asia Pacific has also filed for bankruptcy. Genesis Global Holdco made a statement in which it publicized that it will regard a potential scale or stock-related transaction, to give creditors and that it had $150 million in cash to back the reorganisation. 

The company went on further adding that: 

The branches of Genesis and spot trading, broker-dealer, and custody businesses were not part of the bankruptcy process and will carry on their client trading process. The owner of Genesis DCG revealed that DCG, its employees as well as Genesis board are not indulged in the judgment to go for the bankruptcy filing. 

“Genesis owns its own sole management team, legal counsel as well as financial advisors and determined a special committee of sole directors, who are responsible for Genesis Capital reorganization,” as per the statement. 

Genesis was indulged in a fight with Gemini for a crypto lending product known as Earn that the two companies collaboratively offered to Gemini customers. The Winklevoss twins have stated Genesis has taken over $900 million and about 340,000 Earn investors. On January 10, Cameron Winklevoss called for the elimination of Barry Silbert as CEO of DCG, the Genesis parent. 

After half an hour of the bankruptcy filing, Cameron Winklevoss made a tweet in which he wrote that Silbert and DCG carried on to refuse creditors a good deal and feared to eliminate them unless they make a good offer to the creditors.”

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Source: https://www.thecoinrepublic.com/2023/01/21/genesis-crypto-lending-unit-filed-for-bankruptcy/