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Genesis filed for bankruptcy protection in USA

Genesis Global Capital, LLC, a DCG-owned bitcoin lender, filed for bankruptcy late Thursday night in New York.
| Cryptopress
Last updated: January 20, 2023

CryptoPress

Sadly, one more company joins the list of crypto companies that have fallen into bankruptcy

Genesis Global Capital, LLC, a cryptocurrency lender owned by Digital Currency Group (DCG), filed for bankruptcy late Thursday night in New York. Genesis voluntarily filed three petitions with the bankruptcy court, the company said in a press release. The crypto lender has been having money problems. It owes more than $3 billion to its major creditors, with Gemini having the biggest claim of nearly $900 million.

Cameron Winklevoss, who helped start Gemini, has been in court with Genesis and DCG, which owns Genesis, to get the money owed to Gemini Earn customers. The Securities and Exchange Commission (SEC) has also said that the company used the Earn program to offer and sell securities that were not registered.

This bankruptcy filing is bad news for the industry, which is still trying to get back on its feet after Sam Bankman-Fried’s exchange FTX went bankrupt last year. Genesis Global Capital had frozen customer redemptions on November 16, 2020, due to concerns about the impact of the FTX bankruptcy on other companies in the sector.

The total value of the claims listed in Genesis’ bankruptcy filing amounts to more than $3.6 billion, according to The Block. The company’s lending unit said it had both assets and liabilities in the range of $1 billion to $10 billion and estimated it had over 100,000 creditors in its filing with the U.S. Bankruptcy Court for the Southern District of New York.

In a statement on the company’s website, interim CEO Derar Islim said, “We have made a lot of progress on refining our business plans to fix liquidity issues caused by the recent extraordinary challenges in our industry, such as the default of Three Arrows Capital and the bankruptcy of FTX.” He continued by saying, “However, an in-court restructuring is the best way to protect assets and make sure that everyone who has a stake in Genesis gets the best possible outcome.”

© 2022 Cryptopress. For informational purposes only, not offered as advice of any kind.

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