Crypto lending firm Genesis Global Capital, a subsidiary of crypto conglomerate Digital Currency Group, is reportedly preparing to file for bankruptcy as early as this week.
Bloomberg reported on Jan. 18 that Genesis had previously said it was considering filing for bankruptcy if it could not raise cash amid the liquidity crisis. This is the same situation as the cryptocurrency exchange FTX filed for Chapter 11 in November. Bloomberg reported that Genesis could file for bankruptcy as soon as this week, citing people familiar with the matter.
The report comes after the U.S. Securities and Exchange Commission announced on Jan. 12 that it had charged Genesis and cryptocurrency exchange Gemini with offering unregistered securities through Gemini’s “earn” program. I was. Lawsuits are ongoing.
Gemini co-founder Cameron Winklevoss has published several open letters via social media summoning Digital Currency Group CEO Barry Silbert, citing funds Gemini lent to Gemini as part of the same program. claimed Genesis owed Gemini $900 million to DCG. Said Winklevoss’ claim was a “malicious, bogus, and defamatory attack.”
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Many of the reported liquidity issues could be attributed to the 2022 bankruptcy of cryptocurrency venture capital firm Three Arrows Capital. Silbert told his shareholders in January that Three Arrows owes Genesis his $447.5 million and he owes 4,550 Bitcoin (BTC). At the time, it was valued at approximately $78 million. But Genesis also held about $175 million in FTX before bankruptcy in November, which may have contributed to the company’s liquidity crisis and potential bankruptcy reports. has suspended withdrawals after filing for bankruptcy.
Genesis has suspended withdrawals after FTX filed for bankruptcy. If the company also files for bankruptcy, it would be the latest in a string of bankruptcies including Terraform Labs, Voyager Digital, Celsius Network, Three Arrows Capital, FTX and BlockFi.
