Cryptocurrency Lender Genesis Files For Chapter 11 Bankruptcy

Key Takeaways

• Genesis has filed for bankruptcy.
• The crypto lender owes over $3.5 billion to its top 50 creditors.
• Gemini co-founder Cameron Winklevoss is threatening to sue DCG CEO Barry Silbert.

Months Of Uncertainty

When FTX collapsed in late 2022, it put a lot of pressure on Genesis. This forced the company to stop redemptions in November, and it booked losses that were linked to its exposure to the failed crypto hedge fund Three Arrows Capital.

Genesis Global Holdco (GGH) the parent company of cryptocurrency lending company Genesis Global Capital,has filed for bankruptcy protection in the US.

Genesis said in a statement that the decision was made in order to “strengthen [its] balance sheet and business operations”.

Genesis Global Capital and its lending subsidiary, Genesis Asia Pacific, have filed for bankruptcy protection in the US, the company has announced.

The move will see the two companies restructured under chapter 11 of the US Bankruptcy Code, with operations continuing as normal during the process.

$3.5 Billion in Liabilities

Shortly after filing for bankruptcy, the firm published a list of its top 50 creditors, which include such names as Gemini, Cumberland, Mirana, and MoonAlpha Finance. Other large creditors have had their names redacted. According to the document, Genesis Global Capital owes over $3.5 billion to the creditors on that list. These are only a few of the many creditors that the company owes money to and it’s a large amount that they’re responsible for repaying.

Genesis has now commenced a court-supervised restructuring process to further advance these discussions and reach a holistic solution for its lending business, which, if achieved, would provide an optimal outcome for Genesis clients and Gemini Earn users, the company said.

The company’s assets and liabilities are estimated to be between $1 billion and $10 billion, while Genesis Global Holco—Genesis Global Capital’s parent company—and its subsidiary Genesis Asia Pacific have their own assets and liabilities estimated in the $100 million to $500 million range, respectively.

As part of its Chapter 11 filing, Genesis said it has proposed a road map to an exit that calls for a framework for a global resolution of all claims through a trust that will distribute assets to creditors.

Chapter 11 – Bankruptcy Basics

This chapter of the Bankruptcy Code generally provides for reorganization, usually involving a corporation or partnership. A chapter 11 debtor usually proposes a plan of reorganization to keep its business alive and pay creditors over time. People in business or individuals can also seek relief in chapter 11.

Gemini Co-Founder Cameron Winklevoss Is Threatening To Sue DCG CEO Barry Silbert.

Following the news of Genesis’ bankruptcy filing, Winklevoss took to Twitter, threatening to sue Silbert and Digital Currency Group if they failed to “come to their senses and make a fair offer to creditors.”