On Thursday, January 19, crypto lender Genesis Global finally filed for Chapter 11 bankruptcy protection in the Manhattan federal court. This makes Genesis the latest victim of the series of bankruptcies caused by the collapse of the crypto exchange FTX.
Furthermore, it’s a major blow to Barry Silbert’s Digital Currency Group which has found itself in the midst of troubles recently. The news also comes just within two days of the purported rumor.
Since the collapse of the crypto exchange FTX, Genesis has been facing severe withdrawals and massive liquidity issues. Furthermore, Genesis has its own $175 million stuck on FTX as the crypto exchange collapsed and filed for bankruptcy.
Last month, Genesis had to suspend withdrawals thereby leaving its major client Gemini in trouble. Through its Chapter 11 bankruptcy, Genesis Global has proposed a roadmap to an exit that provides a framework for global resolution and trust to distribute assets to its creditors. Paul Aronzon, an independent director at Genesis said:
“We have crafted a deliberate process and roadmap through which we believe we can reach the best solution for clients and other stakeholders. 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 Negotiating With Creditors
Currently, crypto lender Genesis has been negotiating with the creditors, however, the two parties haven’t been able to attain a fruitful resolution yet. The crypto lender is currently having more than $150 million cash on its hands.
It believes that this would provide them with ample liquidity for supporting its ongoing business operations while facilitating the restructuring process. Genesis and its parent group DCG have been evaluating the most effective path to preserve the assets while moving the business forward.
Amid the current troubles at Genesis, parent group DCG is looking for the sale of its media house CoinDesk. Cardano founder Charles Hoskinson has shown interest in acquiring media outlet CoinDesk for around $200 million.