The collapse of the FTX exchange in late 2022 was the final nail in the coffin for the firm’s crypto lending business
Crypto lender Genesis, an industry pioneer and digital currency prime brokerage, filed for US bankruptcy protection from creditors late on Thursday. It is the third major collapse to hit the crypto industry since last year.
Genesis Global Holdco, and its subsidiaries Genesis Asia Pacific Pte and Genesis Global Capital filed three separate petitions in Manhattan federal court. All three fall under the umbrella of Digital Currency Group (DCG) which also owns crypto news outlet CoinDesk.
The three companies were only involved in Genesis’ crypto lending business, DCG said in a statement.
In its filing, Genesis listed over 100,000 creditors with aggregate liabilities ranging from $1.2 billion to $11 billion, court documents show.
“We look forward to advancing our dialogue with DCG and our creditors’ advisors as we seek to implement a path to maximize value and provide the best opportunity for our business to emerge well-positioned for the future,” Genesis interim CEO Derar Islim said.
Genesis Global Capital, one of the largest crypto lenders, froze customer redemptions in the middle of November after crypto exchange FTX sent shockwaves across the entire sector by its bankruptcy. Genesis reportedly had invested some $175 million into the defunct firm.
According to the statement, Genesis Global Holdco will contemplate a potential sale or an equitization transaction to pay creditors. The company added that it had $150 million in cash to support the restructuring.
In its bankruptcy filing, Genesis listed a $765.9 million loan from Gemini. Other sizeable claims included a $78 million loan from decentralized platform Donut, and a VanEck fund, with a $53.1 million loan.
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January 20, 2023 at 05:45PM