Crypto Lender Genesis Filed for Chapter 11 Bankruptcy Protection
As per the filings, the company has estimated liabilities ranging from $1 billion to $10 billion and assets in the same range.
In a January 19 press release, Genesis announced that the company is in talks with creditors.
As per reports, the crypto lender currently has more than $150 million in cash on hand.
On January 19, Genesis Global officially filed for Chapter 11
Bankruptcy in Manhattan federal court. Genesis is the latest in a string of bankruptcies triggered by the FTX collapse.
Furthermore, it's a significant blow to Barry Silbert's Digital Currency Group, which has recently encountered challenges. The news also comes barely two days after the reported rumor.
Since FTX's collapse, Genesis has been dealing with heavy withdrawals and massive liquidity concerns. Also, Genesis has $175 million locked on FTX after the crypto exchange filed for bankruptcy.
Last month, Genesis suspended withdrawals, putting its key client Gemini at risk. Through its Chapter 11 bankruptcy, Genesis Global has offered a path to exit that includes a structure for a global settlement and trust to distribute assets to creditors. Genesis' independent director, Paul Aronzon, stated:
“We have developed a purposeful strategy and roadmap in order to reach the best solution for clients and other stakeholders. We look forward to continuing our discussions with DCG and our creditors' advisors. As we try to adopt a strategy that will maximize value while also providing the best potential for our company to emerge well-positioned for the future.”
Genesis Is In Talks With Creditors
Currently, crypto lender Genesis is in talks with creditors. However, the two parties have yet to reach a positive conclusion. The crypto lender currently has more than $150 million in cash on hand.
It believes that this will provide them with sufficient capital to continue its current business activities while also easing the restructuring process. Genesis and its parent company DCG have been assessing the best way to keep the assets while moving the firm forward.
In the midst of Genesis' current challenges, parent company DCG is attempting to sell its media company CoinDesk. Cardano founder Charles Hoskinson has expressed interest in purchasing media portal CoinDesk for approximately $200 million.
