Genesis Global Capital, a subsidiary of Digital Currency Group (DCG), is reportedly preparing to file for bankruptcy as soon as this week.
This crypto lending company, which halted withdrawals in November 2022 due to the collapse of FTX, has been trying to raise funds to maintain liquidity.
According to a report by Bloomberg, Genesis Global Capital is in talks with multiple creditor groups to address liquidity issues that have also affected its parent company, DCG.
In November 2022, the crypto lender had indicated that a bankruptcy filing may be necessary unless new capital was raised.
However, sources close to the matter have stated that a bankruptcy filing may not be necessary and that plans could change.
According to reports, creditors of Genesis are actively involved in negotiations for a possible chapter 11 bankruptcy filing.
They may agree to a forbearance period of 1-2 years under a prepackaged bankruptcy plan in exchange for cash payments and equity in Digital Currency Group.
The CEO of DCG, Barry Silbert, has been involved in a public feud with Cameron Winklevoss, the co-founder and President of Gemini.
Winklevoss’ customers are reportedly owed over $900 million as part of Gemini’s Earn Program, which has led to Silbert being criticized in a series of open letters from Winklevoss.
It should be noted that the situation is still ongoing and plans may change. Digital Currency Group has announced that it will be suspending its quarterly dividends to preserve cash following liquidity issues with its subsidiaries.