According to the January 19 filing, crypto lending firm Genesis Trading officially files for Chapter 11 bankruptcy, thereby joining the list of bankrupt crypto firms.
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Lending Firm Genesis Files for Chapter 11 Bankruptcy
Crypto lending firm Genesis Trading officially filed for Chapter 11 bankruptcy on Thursday, January 19, a move that will protect the company from pressure from creditors while it seeks restructuring.
Genesis is a subsidiary of Digital Currency Group (DCG) and has estimated liabilities worth nearly $10 billion, the filing revealed.
“Genesis and its advisors have been engaged in ongoing, productive discussions with advisors to its creditors and corporate parent Digital Currency Group (“DCG”) to evaluate the most effective path to preserve assets and move the business forward,” the firm stated in a release.
To assure creditors, Genesis said it has commenced a restructuring process which is being supervised by the court, and once it reached a holistic solution for its lending business, which if it succeeded, will “provide an optimal outcome for Genesis clients and Gemini Earn users.”
The creditors’ protection was filed in the United States Bankruptcy Court for the Southern District of New York, and it comprises the two of its lending subsidiaries Genesis Global Capital, LLC (“GGC”) and Genesis Asia Pacific Pte. Ltd. (“GAP”).
As part of the bankruptcy filing, the firm has designated a roadmap to an exit including a Chapter 11 plan which demands a framework for a global resolution of all claims through, and the creation of, a trust that will distribute assets to creditors.
“While we have made significant progress refining our business plans to remedy liquidity issues caused by the recent extraordinary challenges in our industry, including the default of Three Arrows Capital and the bankruptcy of FTX, an in-court restructuring presents the most effective avenue through which to preserve assets and create the best possible outcome for all Genesis stakeholders,” said Derar Islim, Interim CEO, Genesis. “We deeply appreciate our clients’ ongoing patience and partnership as we work towards an equitable solution.”
Genesis currently has over $150 million in cash on hand which will serve as liquidity for its ongoing business operations and will foster the firm’s restructuring process.
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