Genesis Global Capital Planning to File For Bankruptcy 

Cryptocurrency lending firm Genesis Global Capital, a subsidiary of crypto conglomerate Digital Currency Group, is reportedly preparing to file for bankruptcy as early as this week. 

Genesis stated in a Bloomberg report that it was considering filing for bankruptcy if it were unable to obtain money in the midst of a liquidity crisis situation similar to that which preceded crypto exchange FTX’s Chapter 11 filing in November. According to Bloomberg, who cited sources with knowledge of the matter, Genesis might declare bankruptcy as soon as this week.

The news came after the US Securities and Exchange Commission sued Genesis and cryptocurrency exchange Gemini for selling unregistered securities through Gemini’s “Earn” program on January 12. The case is still open.

Cameron Winklevoss, the co-founder of Gemini, has also written a number of open letters on social media criticizing Digital Currency Group CEO Barry Silbert and asserting that Genesis is owed $900 million by Gemini for money that Gemini lent to it as part of the same scheme. Winklevoss’ claims, according to DCG, are “malicious, false, and defamatory attacks.”

The failure of the cryptocurrency venture capital firm Three Arrows Capital in 2022 may be the cause of many of the alleged liquidity problems. In January, Silbert informed investors that Three Arrows owed Genesis $447.5 million in addition to 4,550 Bitcoin (BTC), which at the time was valued around $78 million. Prior to its bankruptcy in November, Genesis Global Capital also had over $175 million on FTX, which is likely what contributed to the company’s lack of liquidity and impending insolvency. Genesis stopped accepting withdrawals when FTX declared bankruptcy.

Should Genesis file for bankruptcy as well, they would be the most recent company to fail, following the failures of Terraform Labs, Voyager Digital, Celsius Network, Three Arrows Capital, FTX, and BlockFi.

About Genesis Global Capital

Genesis Global Capital offers institutional clients a complete option for investing huge sums of money. Safeguard, discrete buying and selling, large-scale borrowing and lending with fixed periods, custody services to secure assets, and screening to ensure KYC and AML regulations are satisfied are just a few of the services offered.