A report suggested that the first bankruptcy filing from Genesis could arrive before February. Cryptocurrency lender Genesis Global Capital plans to file for bankruptcy as soon as this week, Bloomberg reports.
Is Genesis planning to file for bankruptcy?
Cryptocurrency lending firm Genesis Global Capital, a subsidiary of crypto conglomerate Digital Currency Group (DCG), is reportedly preparing to file for bankruptcy as early as this week. Genesis has previously said it’s considering filing for bankruptcy if it’s unable to raise cash during a liquidity crunch, according to a January 18 Bloomberg report. This is similar to crypto exchange FTX’s Chapter 11 filing in November. Citing people with knowledge of the situation, Bloomberg reported that Genesis could file for bankruptcy as soon as this week.
The report comes after the United States Securities and Exchange Commission announced on January 12 that it had accused Genesis and crypto exchange Gemini of offering unregistered securities through Gemini’s “Earn” program. Meanwhile, the aforementioned weather is already continuing.
A crypto company is on the way to collapse
cryptocoin.comAs you follow, Gemini co-founder Cameron Winklevoss spoke via social media to Barry Silbert, CEO of Digital Currency Group, who claims Genesis owes Gemini $900 million for funds loaned to Gemini as part of the same program. published several open letters addressing DCG said Winklevoss’ allegations were “malicious, fraudulent and defamatory attacks”.
Many of the reported liquidity issues may stem from the 2022 collapse of crypto venture capital firm Three Arrows Capital (3AC). Silbert told shareholders in January that Three Arrows owed Genesis $447.5 million and 4,550 Bitcoins (BTC), which was worth roughly $78 million at the time. However, Genesis held roughly $175 million in FTX before its bankruptcy in November. This likely contributed to the company’s liquidity crunch and possible bankruptcy reports.
In the process, Genesis suspended withdrawals after FTX filed for bankruptcy. If the firm files for bankruptcy, it will be the latest in a series of collapses, including Terraform Labs, Voyager Digital, Celsius Network, Three Arrows Capital, FTX and BlockFi. In the meantime, if Genesis goes bankrupt, it is likely to seriously affect the cryptocurrency market. Just when the market was about to recover, the arrival of such news turned the direction south. At press time, the leading crypto Bitcoin fell below $ 21 thousand.
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