Crypto Lender Genesis Files for Bankruptcy in New York

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Crypto lender Genesis filed for Chapter 11 bankruptcy late Thursday following the company’s liquidity problems triggered by two major collapses in the cryptocurrency industry last year. It came as the company reportedly sought to raise capital, but failed.

According to the official announcement, Genesis Global Holdco and its two lending subsidiaries, Genesis Global Capital and Genesis Asia Pacific, have filed for Chapter 11 voluntary petition in a Manhattan court. Barry Silbert, the CEO of Digital Currency Group, oversees these companies.

However, only the brand’s loan business applied for bankruptcy protection. Genesis’ other subsidiaries, which offer derivatives, spot trading, custody services and Genesis Global Trading, are not included in the bankruptcy proceedings.

Check out the latest FMLS22 session on “Marketing Digital Assets Under a Magnifying Glass.”

The Debts of Genesis

In the bankruptcy filings, Genesis Global Capital is estimated to have more than 100,000 creditors and has liabilities between $1 billion and $10 billion. The liabilities of the other two companies are estimated to be in the range of $100 million and $500 million, respectively.

Genesis proposed a road map to exit with a bankruptcy plan, proposing a resolution of the claims with the formation of a trust. The filing highlighted that it must repay a $765.9 million loan to Gemini, a $78 million loan to the decentralized platform Donut, and another $53.1 million loan to the VanEck fund.

“We have developed a deliberate process and roadmap through which we believe we can achieve the best solution for customers and other stakeholders,” said Paul Aronzon, independent Director at Genesis.

“We look forward to furthering 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’ problems began last year with the collapse of the Three Arrows Capital and were dealt the final blow with the fallout from FTX last November. Additionally, the company was pressured to repay $900 million that was kept in locked deposits and received by Gemini Earn users.

“While we have made significant progress refining our business plans to fix liquidity

Liquidity

The term liquidity refers to the process, speed and ease by which a given asset or security can be converted into cash. In particular, liquidity assumes retention in market price, where the most liquid assets represent cash. The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without material. affecting its market price. · Nothing is more liquid than cash, while other assets represent

The term liquidity refers to the process, speed and ease by which a given asset or security can be converted into cash. In particular, liquidity assumes retention in market price, where the most liquid assets represent cash. The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without material. affecting its market price. · Nothing is more liquid than cash, while other assets represent
Read this Term issues caused by the recent extraordinary challenges in our industry, including the default of Three Arrows Capital and the bankruptcy of FTX, an in-court restructuring presents the most efficient way to preserve assets and create the best possible outcome for all Genesis stakeholders,” said Genesis Interim CEO Derar Islam.

Meanwhile, the US federal securities regulator brought charges against Genesis and Gemini for offering unregistered securities in the form of crypto loan products. Another crypto lending platform, Nexo, recently settled with US regulators paying a total penalty of $46.5 million.

Crypto lender Genesis filed for Chapter 11 bankruptcy late Thursday following the company’s liquidity problems triggered by two major collapses in the cryptocurrency industry last year. It came as the company reportedly sought to raise capital, but failed.

According to the official announcement, Genesis Global Holdco and its two lending subsidiaries, Genesis Global Capital and Genesis Asia Pacific, have filed for Chapter 11 voluntary petition in a Manhattan court. Barry Silbert, the CEO of Digital Currency Group, oversees these companies.

However, only the brand’s loan business applied for bankruptcy protection. Genesis’ other subsidiaries, which offer derivatives, spot trading, custody services and Genesis Global Trading, are not included in the bankruptcy proceedings.

Check out the latest FMLS22 session on “Marketing Digital Assets Under a Magnifying Glass.”

The Debts of Genesis

In the bankruptcy filings, Genesis Global Capital is estimated to have more than 100,000 creditors and has liabilities between $1 billion and $10 billion. The liabilities of the other two companies are estimated to be in the range of $100 million and $500 million, respectively.

Genesis proposed a road map to exit with a bankruptcy plan, proposing a resolution of the claims with the formation of a trust. The filing highlighted that it must repay a $765.9 million loan to Gemini, a $78 million loan to the decentralized platform Donut, and another $53.1 million loan to the VanEck fund.

“We have developed a deliberate process and roadmap through which we believe we can achieve the best solution for customers and other stakeholders,” said Paul Aronzon, independent Director at Genesis.

“We look forward to furthering 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’ problems began last year with the collapse of the Three Arrows Capital and were dealt the final blow with the fallout from FTX last November. Additionally, the company was pressured to repay $900 million that was kept in locked deposits and received by Gemini Earn users.

“While we have made significant progress refining our business plans to fix liquidity

Liquidity

The term liquidity refers to the process, speed and ease by which a given asset or security can be converted into cash. In particular, liquidity assumes retention in market price, where the most liquid assets represent cash. The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without material. affecting its market price. · Nothing is more liquid than cash, while other assets represent

The term liquidity refers to the process, speed and ease by which a given asset or security can be converted into cash. In particular, liquidity assumes retention in market price, where the most liquid assets represent cash. The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without material. affecting its market price. · Nothing is more liquid than cash, while other assets represent
Read this Term issues caused by the recent extraordinary challenges in our industry, including the default of Three Arrows Capital and the bankruptcy of FTX, an in-court restructuring presents the most efficient way to preserve assets and create the best possible outcome for all Genesis stakeholders,” said Genesis Interim CEO Derar Islam.

Meanwhile, the US federal securities regulator brought charges against Genesis and Gemini for offering unregistered securities in the form of crypto loan products. Another crypto lending platform, Nexo, recently settled with US regulators paying a total penalty of $46.5 million.

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