Crypto lender Genesis files for bankruptcy as FTX fallout continues

Crypto lender Genesis files for bankruptcy as FTX fallout continues

  • Crypto lender Genesis filed for bankruptcy on Thursday, the latest fallout from FTX’s collapse.
  • Genesis’ parent company, Digital Currency Group, is struggling with liquidity problems.
  • Bankruptcy documents show Genesis has more than 100,000 creditors with liabilities of up to $11 billion.

Crypto lender Genesis Global Holdco filed for bankruptcy protection on Thursday, the latest firm to fall victim to last year’s digital asset defeat and the fallout from FTX’s collapse.

The company and two of its lenders, Genesis Global Capital and Genesis Asia Pacific, filed voluntary Chapter 11 filings, citing “liquidity issues.” It has over 100,000 creditors with assets and liabilities ranging from $1.2 billion to $11 billion, bankruptcy filings show.

“While we have made significant progress in refining our business plans to address liquidity issues caused by the recent exceptional challenges in our industry, including the insolvency of Three Arrows Capital and the bankruptcy of FTX, a court restructuring represents the most effective path dar assets and achieve the best possible outcome for all Genesis stakeholders,” said Genesis’ interim CEO Derar Islam.

The filing comes as Genesis and its parent company Digital Currency Group are facing financial troubles stemming from the collapse of high-profile crypto companies like FTX and Three Arrows Capital. The Financial Times reported that Genesis owes its creditors more than $3 billion.

Genesis halted redemptions after FTX’s implosion in November, warning at the time that bankruptcy was a possibility if it couldn’t find fresh capital.

The turmoil at the crypto giant spilled over into its lending partner Gemini, a cryptocurrency platform led by Cameron and Tyler Winklevoss. It sparked a public row between the two crypto firms as Genesis owes Gemini more than $900 million under an interest-bearing scheme.

The two companies have since been sued by the Securities and Exchange Commission for offering and selling unregistered securities.

Genesis reportedly has more than $150 million in cash that will support the company in its restructuring process.

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