Two months after suspending client withdrawals, Genesis has become the latest cryptocurrency market participant to declare bankruptcy.
Bloomberg reported on Thursday that the company conducted private conversations with its various creditors. The lending section was devastated by the collapse of FTX, where it had $175 million in frozen funds, and had warned prospective investors of insolvency if it was unable to secure new funding.
A source earlier informed Blockworks that Genesis was “trying at all costs to prevent [bankruptcy],” describing the effort as “admirable, but expensive.” Gemini has accused Digital Currency Group, the parent firm of Genesis, of making misleading statements regarding Genesis’ solvency.
Cameron Winklevoss, a co-founder of Gemini, demanded that DCG’s board remove CEO Barry Silbert, claiming that Silbert had misled Gemini and that its consumers were unable to access $900 million held in a Genesis-related product. Silbert refuted this assertion and said that DCG owes Genesis $447,5 million in addition to $78 million of bitcoin maturing in May of this year.
Additionally, he noted, Genesis owes an additional $1,100,000,000 maturing in 2032. Additionally, he said that DCG has not borrowed cash from Genesis since May 2022 and is current on all existing debts.
Nonetheless, DCG allegedly warned shareholders last week that it would withhold dividends in an effort to decrease operational expenditures and maintain liquidity. According to the Financial Times, DCG is one of the most active investors in the crypto business, with over 200 million investments in 35 nations worth approximately $500 million.
It operates principally five companies, including the media company CoinDesk, Genesis, Foundry, and the digital asset exchange Luno. Reportedly, CoinDesk is contemplating a partial or complete sale. The SEC has accused Genesis and Gemini of marketing unregistered securities to individual investors via the Earn program.
Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial or investment advice. Cryptocurrency investments are subject to market risks, and individuals should seek professional advice before making any investment decisions.