Cryptocurrency lending company Genesis Global Capital, a subsidiary of crypto conglomerate Digital Currency Group, is reportedly preparing to file for bankruptcy as early as this week.
According to a January 18 Bloomberg report, Genesis earlier he said was considering filing for bankruptcy if it was unable to raise cash amid a liquidity crunch — a situation similar to the one in which crypto exchange FTX filed for Chapter 11 in November. Bloomberg, citing people with knowledge of the situation, said Genesis could file for bankruptcy as early as this week.
The report followed the United States Securities and Exchange Commission announcing January 12 that it accused Genesis and the Gemini crypto exchange of offering unregistered securities through Gemini’s “Earn” program. The case continues.
Gemini co-founder Cameron Winklevoss also published several open letters via social media calling out Digital Currency Group CEO Barry Silbert and declaring Genesis. owed Gemini $900 million in funding The Gemini loaned her under the same program. DCG he said Winklevoss’ allegations were “malicious, false and defamatory attacks”.
Many of the reported liquidity problems can stems from the collapse crypto venture capital firm Three Arrows Capital in 2022. Silbert told shareholders in January that Three Arrows owed Genesis $447.5 million and 4,550 bitcoins (BTC) — worth roughly $78 million at the time. However, Genesis also held roughly $175 million in FTX before its November bankruptcy, which likely contributed to the firm’s reduced liquidity and reports of potential insolvency. Genesis suspended withdrawals after FTX filed for bankruptcy.
Genesis suspended withdrawals after FTX filed for bankruptcy. If the firm also files for bankruptcy, it would be the latest in a string of collapses, including Terraform Labs, Voyager Digital, Celsius Network, Three Arrows Capital, FTX and BlockFi.