Genesis Global Holdco, the parent company of cryptocurrency lender Genesis Global Capital, filed for Chapter 11 bankruptcy protection on January 20.
The move came after Genesis Global Capital halted customer repayments on November 16, raising concerns about the potential failure of other firms.
According to bankruptcy records, Genesis Global Capital named over 100,000 creditors in a “mega” bankruptcy filing, with total obligations ranging from $1.2 billion to $11 billion.
Despite months of speculation about the potential for bankruptcy, the news still shocked many in the cryptocurrency industry.
The U.S. Securities and Exchange Commission (SEC) had just launched a complaint against Genesis and its ex-partner Gemini for the alleged illegal sale of securities, adding to the company’s woes.
Digital Currency Group (DCG), which owns CoinDesk and is the parent company of Genesis Global Holdco and its subsidiaries GGC and Genesis Asia Pacific Pte. Ltd., responded to the bankruptcy filing by stating that it would consider a sale or equity deal to pay off creditors. DCG also noted that it had $150 million in cash to support the restructuring.
Genesis Capital Bankruptcy Case Close To Resolution
Fast forward to the present day, per a recent report by The Block, DCG has provided an update on the situation, stating that it is close to resolving the claims in the bankruptcy case of its lending unit Genesis Capital.
In a letter to shareholders, DCG said, “After months of tireless negotiations led by DCG leadership, we are close to reaching an agreement in principle to resolve the claims in the Genesis Capital Chapter 11 cases.” The update comes just a month after Gemini, among Genesis’ creditors, sued the firm alleging fraud.
DCG’s optimism about resolving the bankruptcy case will be welcome news to the cryptocurrency industry, which has been closely monitoring the situation. As one of the biggest crypto lenders, Genesis Global Capital’s failure would significantly affect the broader ecosystem.
It remains to be seen what the outcome of the negotiations will be, but DCG’s efforts to resolve the situation quickly and efficiently bode well for the future of the company and the industry as a whole.
Former JPMorgan And Goldman Sachs Executive Joins DCG As CFO
Reuters recently reported that Digital Currency Group has announced the appointment of Mark Shifke as its new Chief Financial Officer (CFO).
Shifke has almost four decades of experience in the financial industry and has a background in mergers and acquisitions, having previously worked at major financial institutions such as JPMorgan Chase and Goldman Sachs. Before joining DCG, Shifke was CFO of Billtrust, a financial services company.
The appointment of Shifke comes at a crucial time for DCG, which is currently facing legal battles. DCG owns a portfolio of crypto companies, including CoinDesk, a crypto news and events site, and Grayscale, a primary digital asset manager.
In a statement, DCG founder and CEO Barry Silbert praised Shifke’s strategic vision and leadership skills, highlighting his deep finance and fintech experience. The appointment is expected to strengthen DCG’s position as a key player in the crypto industry.
Featured image from Unsplash, chart from TradingView.com
Source: https://bitcoinist.com/genesis-chapter-11-bankruptcy-set-to-be-resolved/