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Crypto lending Genesis files for bankruptcy

Genesis crypto lender files for Chapter 11 bankruptcy

Genesis, a major cryptocurrency lender, has filed for Chapter 11 bankruptcy in the Southern District of New York.

According to a filing on Jan. 19, the company has estimated liabilities of $1 billion to $10 billion and assets in the same range.

The filing comes after reports that the company had been considering filing for bankruptcy protection if it was unable to raise capital to stem its liquidity crisis.

In a press release on January 19, Genesis said that it had been in discussions with its advisors, creditors and corporate parent Digital Currency Group (DCG) to evaluate the most effective path to preserve assets and move the business forward.

The company’s Chapter 11 plan sees it contemplating a “dual track process” pursuing a “sale, capital raise, and/or an equitization transaction” that would apparently enable the business “to emerge under new ownership.”

However, the derivatives, spot trading, broker-dealer, and custody businesses of Genesis are not part of the Chapter 11 proceedings and will continue operations according to the firm.

Genesis also claims to have more than $150 million in cash on hand, which it believes “will provide ample liquidity to support its ongoing business operations and facilitate the restructuring process.”

The restructuring process will be led by an “independent special committee” of the company’s board of directors, and Genesis says the process is aimed at providing “an optimal outcome for Genesis clients and Gemini Earn users.”

It’s worth noting that both Genesis and Gemini are facing charges from the United States Securities and Exchange Commission (SEC) for allegedly offering unregistered securities through the Earn program.

Additionally, concerns are mounting over Genesis’ parent company DCG as it may have to sell part of its $500 million venture capital portfolio to try to offset Genesis’ liabilities.

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Judith Faith has been writing about cryptocurrencies and blockchain technology for over five years. She is well versed in the industry and has an extensive network of industry contacts. She is also a frequent contributor to various cryptocurrency publications. With her vast knowledge and experience, she is able to provide insightful and valuable content to her readers. Judith is also an active investor in the cryptocurrency space and has a vested interest in the success of the industry. She is passionate about helping to foster the growth of the industry and believes in the power of blockchain technology to revolutionize the world.