Crypto lender Genesis filed for bankruptcy protection from creditors in the US late Thursday. It is now the third major cryptocurrency player to collapse since last year.
Three separate petitions were filed in Manhattan federal court for Genesis Global Holdco, and its subsidiaries Genesis Asia Pacific Pte and Genesis Global Capital. All three operate under parent company Digital Currency Group (DCG), which also operates the subsidiaries CoinDesk, Foundry, Grayscale Investments, and Luno.
DCG noted in a statement, the three companies only operated Genesis’ crypto-lending operations.
The filing listed more than 100,000 creditors, with total liabilities of between $1.2 billion and $11 billion, according to documents of the court.
Genesis interim CEO Derar Islim said, “We look forward to advancing our dialogue with DCG and our creditors’ advisors as we seek to implement a path to maximize value and provide the best opportunity for our business to emerge well-positioned for the future.”
One of the largest crypto-lenders in the field, Genesis was forced to freeze customer withdrawals in mid-November, following the collapse of cryptocurrency exchange FTX, which shocked the entire sector when it filed for bankruptcy. Genesis had noted it had a $175 million exposure to the collapse of FTX.
In the statement, it was revealed Genesis Global Holdco is considering a potential sale, or an equitization deal to pay creditors. The statement noted the company had $150 million in cash to finance any restructuring costs.
The bankruptcy filing noted a $765.9 million loan it had received from cryptocurrency exchange Gemini, as well as a $78 million loan from Donut, a decentralized platform, and a $53.1 million loan from VanEck fund.
Gemini has had a very public dispute with Genesis over a reported $900 million in Gemini customer funds which were loaned to Genesis as part of a partnership, where Gemini allowed customers to earn returns on their crypto assets through utilization of Genesis’ Earn program.
Separately another group has sued Genesis alleging another $900 million in inaccessible crypto assets.
