Tuesday, February 7, 2023
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Genesis Plans To File For Bankruptcy

According to sources with knowledge of the situation, Genesis Global Capital is preparing to file for bankruptcy as soon as this week. In the midst of a liquidity crisis, Digital Currency Group’s bitcoin lending subsidiary has been in confidential discussions with numerous creditor parties. Bloomberg previously reported that it has warned that if it was unable to secure funds, it may be forced to declare bankruptcy.

Genesis Global Capital representatives did not immediately reply to calls for comment. A DCG spokesman refused to comment. Talks are continuing, and plans may alter, according to the sources. After the failure of hedge fund Three Arrows Capital, financial pressures started to mount at Barry Silbert’s DCG. Genesis halted withdrawals in November, shortly after the crypto exchange FTX, where Genesis stored part of its cash, declared bankruptcy. The failures have had an impact on the cryptocurrency exchange Gemini Trust, which is managed by Cameron and Tyler Winklevoss. Gemini Earn, a programme that let Gemini users earn interest by lending out their coins via Genesis, also ceased operations.

Creditors, Genesis, and DCG have exchanged multiple ideas but have yet to reach an agreement, according to the sources. Groups of creditors have been advised by Kirkland & Ellis and Proskauer Rose. According to persons involved with the negotiations, the business is working on a restructuring plan and has exchanged offers with its creditors, some of whom have recommended obtaining a combination of cash and shares from DCG.

According to a Jan. 17 letter to shareholders obtained by Bloomberg, DCG informed shareholders that it was suspending quarterly payouts in order to preserve cash. DCG, a real estate company, and CoinDesk, a cryptocurrency news site, disclosed to Bloomberg on Wednesday that it has hired Lazard as a financial consultant to examine alternatives such as a partial or complete sale.

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Jeewan Singh is CryptoShrypto’s content writer and a seasoned writer with over two years of experience in writing about Indian Securities Market. Jeewan's participation in Blockchain and Cryptocurrency started in late 2020, and he hasn't looked back since. The technical and economic outcomes of cryptocurrency are what spark his curiosity, and he keeps one eye on the market.
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