- Genesis, a cryptocurrency lending company, filed for bankruptcy protection on Jan. 19.
- The company owed nearly $3.4 billion to creditors after being thrown off a market flight as well as FTX along with BlockFi.
The company suspended withdrawals on Nov. 16 after major FTX exchange filed for bankruptcy. The bankruptcy filing is clearly the most recent crypto failure due to a market downturn that snatched nearly $1.3 trillion from the value of crypto tokens in 2022. As bitcoin has recovered already this year, the downturn of the market has continued to repeat itself in the most interconnected area.
The company filed for bankruptcy in the United States Bankruptcy Court for the Southern District of New York which calculated that it had more than 100,000 creditors, that its assets were nearly $5.3 billion, and that its debts, with intercompany liability , were approximately $5.1 billion as disclosed Nov. 30.
The company plan
Genesis has worked out a plan to pass the bankruptcy by May 19, according to the court filing. He will attempt to auction off his assets over the next three months to repay the money to creditors, according to court documents.
Genesis Global Capital’s parent company, Genesis Global Holdco and Genesis Asia Pacific have also filed for bankruptcy. Genesis Global Holdco released a statement touting that it will be in a potential equity or stock transaction to be given to creditors and that it had $150 million in cash to back the reorganization.
The company also added that:
Genesis subsidiaries and spot trading, broker-dealer and custody businesses were not part of the bankruptcy process and will continue their client trading process. Genesis owner DCG has revealed that DCG, its employees and the Genesis board of directors have not bowed to the judgment of filing for bankruptcy.
“Genesis has its own unique management, legal and financial advisors team and has established a special committee of sole directors, who are responsible for the reorganization of Genesis Capital,” according to the statement.
Genesis got into a fight with Gemini over a cryptocurrency lending product known as Earn that the two companies have jointly offered to Gemini customers. The Winklevoss Twins Said Genesis Acquired Over $900 Million and About 340,000 Earn Investors. On January 10, Cameron Winklevoss called for the elimination of Barry Silbert as CEO of DCG, the parent of Genesis.
Within half an hour of filing for bankruptcy, Cameron Winklevoss tweeted that Silbert and DCG kept refusing creditors a good deal and feared they would eliminate them unless they made a good offer to the creditors.
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