Genesis, a cryptocurrency lender, has filed for bankruptcy. This is the latest company to go bust in the wake of the rapid collapse of the FTX exchange.
Genesis suffered a devastating blow when FTX collapsed in 2022. Genesis had already lost several hundred million dollars earlier that year to Three Arrows Capital, a failed crypto hedge fund.
Court documents reveal that the company and its subsidiaries Genesis Global Capital, and Genesis Asia Pacific, applied for Chapter 11 protection in the Southern District of New York on Thursday.
Genesis Global Capital listed the exact same range of $1bn-10bn (£810m-£8.1bn) for assets and liabilities, as well as more than 100,000 creditors. The top 50 unsecured claims are approximately $3.4bn (£2.8bn).
Its parent company Digital Currency Group, (DCG), had been involved in confidential negotiations with several creditor groups during a liquidity crisis. Genesis warned that bankruptcy could be possible if the company fails to raise funds.
After the collapse of Three Arrows Capital, a hedge fund, financial pressure began to mount at DCG.
Genesis’s lending unit stopped withdrawing funds in November, shortly after FTX filed for bankruptcy.
Barry Silbert, the chief executive of the company, is engaged in a heated battle with Cameron Winklevoss (Gemini crypto exchange cofounder), whose customers have lost $900m in Genesis-placed funds.
Earlier this month, Genesis announced it was laying off 30% of its staff, taking it down to 145 employees.
