Genesis bankruptcy imminent as creditor negotiations stall: reports

Crypto Lender Genesis, a wholly owned subsidiary of Digital Currency Group (DCG), is on the verge of filing for bankruptcy after negotiations between the troubled company and creditors failed to move forward, according to multiple reports.

bloombergSources close to the situation said Thursday that Genesis is preparing to file for bankruptcy protection as soon as this week. origin The first to warn of such a step in November thereafter Customer’s outstanding withdrawals Continued FTX cryptocurrency exchange collapse.

According to Genesis and parent company DCG, it failed to reach an agreement with creditors despite several proposals. bloomberg.

neighborhood I also reported today that Genesis and its creditors are negotiating a Chapter 11 bankruptcy plan. As part of the proposed deal, Creditors agree to a grace period of between one and two years for payments and receive cash and equity from DCG as part of the deal, neighborhood Reported quoting unnamed sources.

Neither Genesis nor DCG immediately responded DecryptComment request.

The fall of FTX has left holes in the balance sheets of many other cryptocurrency makers, causing contagion to spread since early November. Genesis in november said that She has $175 million worth of cryptocurrency Locked in FTX, which it currently is It is going through its own Chapter 11 bankruptcy process. Overall, however, Genesis has a shortfall of $3 billion, according to economic times.

Crypto Gemini exchange claims that Genesis has more than $900 million in customer funds from its Gemini Earn program, which allows users to earn interest on deposited assets. Gemini Earn users have not had access to these funds since Genesis stopped withdrawing.

It has led to General war of words Between Gemini co-founders Tyler and Cameron Winklevoss and DCG founder and CEO Barry Silbert, that has intensified in recent weeks as the Winklevoss brothers have called for Silbert’s resignation. general disagreement After several weeks of negotiations between companies and creditors.

Last week, the US Securities and Exchange Commission Download both Genesis and Gemini With the filing of unregistered securities in connection with Gemini Earn.

On Jan. 4, Gemini Interim CEO Derar Islim said The company needed more time To try to find a solution to the liquidity crisis. The next day, Genesis cut 30% of its staff To reduce costs and stabilize the company in the midst of the crisis.

DCG is Consider selling assets of its investment portfolio, which includes stakes in more than 200 crypto projects — such as cryptocurrency exchange Coinbase and the US dollar stablecoin issuance circuit — to cover the Genesis shortfall, economic times I mentioned last week.

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