Crypto firm Genesis reportedly planning to file for bankruptcy: reports
Genesis Global Capital, a subsidiary of the cryptocurrency conglomerate Digital Currency Group, is said to be getting ready to file for bankruptcy as soon as this week.
Genesis previously stated that it was considering filing for bankruptcy if it were unable to raise cash amid a liquidity crunch, similar to the situation that led to the Chapter 11 filing of crypto exchange FTX in November.
The planning of Genesis was reported by Bloomberg on January 18. Bloomberg said, citing people with knowledge of the situation, that Genesis could file for bankruptcy this week.
Genesis and its parent company face increasing difficulties
According to Bloomberg, Genesis is in private talks with a number of creditor groups, and the company has said it may file for bankruptcy if it can't manage to raise capital.
Strikingly, the report comes just days after Genesis' parent company, Digital Currency Group (DCG), stopped paying quarterly dividends. In order to maintain liquidity and cut costs, this step was taken.
Additionally, since the beginning of the year, the crypto lending platform has been at odds with Gemini, a prominent American cryptocurrency exchange. The suspension of Genesis withdrawals, implemented in November in response to the FTX collapse, is the source of the conflict.
Users of Gemini's Earn have been unable to access their funds since then. The Earn program was used by nearly 340,000 people on the cryptocurrency exchange. At the moment, it is estimated that Genesis has locked in $900 million. Additionally, Cameron Winklevoss, the CEO of Gemini, has demanded that Barry Silbert be fired as a result of the dead-end conversations.
