Genesis Global Holdco, LLC, the holding company of unsettled crypto lender Genesis Global Capital, filed for Chapter eleven bankruptcy security in New York district court late on Thursday. This was always on the cards. The failure of FTX in late 2022 was indeed the final nail in the coffin for Genesis, which had initially announced an economic loss of several hundred million dollars due to its ties to flawed crypto hedge fund Three Arrows Capital. As a result, Genesis has filed for bankruptcy.
Genesis and Chapter 11 bankruptcy
1/ Earn Update: This evening, Genesis Global Capital, LLC (Genesis) filed for bankruptcy under Chapter 11. This is a crucial step towards us being able to recover your assets.
As mentioned earlier, Genesis has declared bankruptcy after enduring catastrophic losses as a consequence of the screw-ups of FTX and hedge fund Three Arrows Capital. Genesis is a subsidiary of Barry Silbert’s Digital Currency Group, which has been plagued by issues in recent days or weeks.
Just a few days ago, Cameron Winklevoss, the founder of cryptocurrency exchange Gemini had accused Digital Currency Group (DCG) CEO Barry Silbert of “bad faith stall tactics” and demanded that he commit to resolving $900 million in disputed customer assets by January 8th. Circle, which currently runs the stablecoin USD Coin, and Gemini, which is strongly supported by the Winklevoss twins, are two of Genesis’ greatest clients.
Genesis, the crypto lender, filed for bankruptcy protection late on Thursday in Manhattan federal district court and became the newest disaster of the business epidemic triggered by the collapse of FTX and trying to deal a devastating blow to an industry that was once among the epicenter of Barry Silbert’s Digital Currency Group.
According to bankruptcy papers, the company registered more than 100,000 lenders in “mega” bankruptcy proceedings, with aggregate debts varying from $1.2 billion to 11 billion dollars.
The filing comes after several months of speculation about whether Genesis would declare bankruptcy, and just days just after the Securities and Exchange Commission held liable Genesis and its ex-partner, Gemini, for the unauthorized proposition and sales of securities.