Crypto Lending Unit Of Genesis Files For Bankruptcy In U.S.
The lending unit of crypto firm Genesis filed on Thursday for US bankruptcy protection from creditors, toppled by a market rout along with the likes of exchange FTX and lender BlockFi.
Photo Insert: Genesis’ lending unit said it had both assets and liabilities in the range of $1 billion to $10 billion in its filings with the US Bankruptcy Court for the Southern District of New York.
Genesis Global Capital, one of the largest crypto lenders, froze customer redemptions on Nov. 16 after FTX stunned the financial world with its bankruptcy, fueling concern that other companies could implode. The company is owned by venture capital firm Digital Currency Group (DCG.)
Genesis’ lending unit said it had both assets and liabilities in the range of $1 billion to $10 billion in its filings with the US Bankruptcy Court for the Southern District of New York. Genesis Global Holdco, the parent group of Genesis Global Capital, also filed for bankruptcy protection, along with another lending unit Genesis Asia Pacific.
Genesis Global Holdco said in a statement that it would contemplate a potential sale or an equitization transaction to pay creditors, and that it had $150 million in cash to support the restructuring.
It added that Genesis’ derivatives and spot trading, broker-dealer and custody businesses were not part of the bankruptcy process, and continue their client trading operations.
Genesis’s bankruptcy filing is the latest in a cascade of crypto failures and steep job cuts triggered by plunging prices last year. Genesis was already locked in a dispute with Gemini Trust Co, founded by the identical twin cryptocurrency pioneers Cameron and Tyler Winklevoss, former US Olympic rowers.
The two firms are fighting over a crypto lending product called Earn that they jointly offered.
The Winklevoss twins have said Genesis owed more than $900 million to some 340,000 Earn investors. On Jan. 10, Cameron Winklevoss called for the removal of Barry Silbert as the chief executive of Digital Currency Group.