Parent company Genesis Capital Digital Currency Group (DCG) denied participating in Genesis’ bankruptcy filing in a Jan. 20 statement. According to DCG, a special committee of independent directors recommended and decided to file for Chapter 11 bankruptcy protection.
Filing for Chapter 11 will allow Genesis to seek to reorganize its debts, assets and other business activities. The company estimated liabilities at $1 billion to $10 billion, along with assets in the same range. The DCG said in a statement that:
“Genesis has its own independent management team, legal counsel and financial advisors and appointed a special committee of independent directors to oversee the restructuring of Genesis Capital who recommended and decided that Genesis Capital file for Chapter 11. Neither DCG nor any of its employees, including those who sit on the Genesis board, was involved in the decision to file for bankruptcy.”
Only Genesis’ lenders (Genesis Global Holdco, Genesis Global Capital and Genesis Asia Pacific – collectively known as “Genesis Capital”) have filed for bankruptcy protection. Genesis Global Trading and the Genesis Spot and Derivatives Trading Company will remain operational.
— Digital Currency Group (@DCGco) January 20, 2023
DCG said it intends to continue business as usual, the statement said, along with its other subsidiaries, including Grayscale Investments, Foundry Digital, Lino Group Holdings, CoinDesk and TradeBlock Corporation.
In a letter sent to shareholders on January 17, DCG confirmed that it owes “$526 million due in May 2023 and $1.1 billion under a note due in June 2032.” The company noted that it intends to address the liabilities to Genesis Capital in the course of the restructuring. A letter too announced the suspension of the quarterly dividend payments to preserve liquidity, Cointelegraph reported.
Genesis’ problems became apparent after a download halt in November, which it blamed on “unprecedented upheavals in the market“, which followed the collapse of FTX. The company later revealed that $175 million was stuck in an FTX account. The halt in withdrawals affected clients of the Gemini crypto exchange and prompted calls for DCG’s board of directors to remove Barry Silbert as CEO companies.