Following the collapse of FTX, cryptocurrency lender Genesis Global has become the latest company to file for Chapter 11 bankruptcy protection in New York.
Genesis, a cryptocurrency lender, has declared Chapter 11 bankruptcy in the Southern District of New York.
According to the Jan. 19 filing, the company has estimated liabilities of $1 billion to $10 billion and assets in the same range.
The firm was considering filing for bankruptcy if it could not secure funds to address its liquidity issue.
According to the January 19 filing, the company has estimated liabilities of $1 billion to $10 billion and assets in the same range.
According to previous reports, the firm was considering filing for bankruptcy if it could not secure funds to address its liquidity issue.
Genesis stated in a press release dated January 19 that it had been in talks with its advisors “to its creditors and corporate parent Digital Currency Group to evaluate the most effective path to preserve assets and move the business forward.”
“Genesis has now commenced a court-supervised restructuring process to further advance these discussions.”
According to the firm’s Chapter 11 plan, it is considering a “dual track approach” involving a “sale, capital raising, and/or an equitization transaction” that would allow the company to “emerge under new ownership.”
Genesis will continue to operate
Genesis derivatives, spot trading, broker-dealer, and custody businesses are not included in the Chapter 11 proceedings and will continue to operate, according to the company.
It also stated that it had over $150 million in cash, which it believes “will provide adequate liquidity to fund its business activities and ease the restructuring process.”
The reorganization would be overseen by an “independent special committee” of the company’s board of directors to produce “an optimal conclusion for Genesis clients and Gemini Earn users.”
Withdrawals from the platform were halted in November 2022 due to market turmoil triggered by the failure of FTX. Customers of Gemini Earn, a yield-bearing product for users of Genesis’ Gemini cryptocurrency exchange, were harmed by the adjustment.
Gemini co-founder Cameron Winklevoss tweeted that the bankruptcy is a “critical step” in allowing Gemini users to reclaim their assets but its CEO Barry Silbert “continue to refuse to provide creditors a fair settlement” and vowed to sue “until Barry and DCG come to their senses.”
6/ Unless Barry and DCG come to their senses and make a fair offer to creditors, we will be filing a lawsuit against Barry and DCG imminently.— Cameron Winklevoss (@cameron) January 20, 2023
The United States Securities and (SEC) has charged Genesis and Gemini with marketing unregistered securities through the Earn program.
Concerns are growing about Genesis’ parent firm, DCG, which may have to sell a portion of its $500 million venture capital portfolio to balance Genesis’ liabilities.