Genesis Global Holdco LLC, the parent company of embattled crypto lender Genesis, filed for Chapter 11 bankruptcy protection late Thursday night in the Southern District of New York after it was caught up in the aftermath of the implosion of the crypto exchange FTX Trading Ltd.

In its filing, the company listed over 100,000 creditors with liabilities ranging between $1.2 billion and $11 billion dollars, according to bankruptcy documents.

Three separate petitions were filed covering Genesis Global Holdco and two of the companies’ lending subsidiaries, Genesis Global Capital LLC and Genesis Pacific Pte. Ltd., which also filed voluntary petitions with the court. Genesis’s other subsidiaries involved in derivatives and spot trading and crypto custody were not included.

The filing follows reports earlier this week that the company was considering bankruptcy after the lender suspended withdrawals in November, soon after the collapse and bankruptcy of FTX – where the lender had over $175 million of its assets locked on the exchange.

Earlier in the year the company suffered what it called “hundreds of millions of losses” that happened in June due to its exposure to the collapse of the crypto hedge fund Three Arrows Capital and Hong Kong-based lender Babel Finance. An event that sent ripple effects through the entire crypto industry and caused even further bankruptcies.

Genesis announced it was laying off 30% of its staff earlier this month, bringing its staff down to 145. The company had previously laid off 20% of its workforce in August.

“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 chief executive of Genesis.

In the filing, the company included a $765.9 million loan payable to the cryptocurrency exchange Gemini Trust Company LLC. When the company suspended withdrawals in November, it affected the former company’s Earn program, a yield-bearing product of the exchange.

Both Genesis and Gemini have also been sued by the United States Securities and Exchange Commission in regard to the Earn program, alleging that both companies were involved in selling unregistered crypto securities.

Other large creditors include $151.5 million owed to crypto-fund Mirana, $18.7 million owed to the trading firm Cumberland DRW, $150 million owed to MoonAlpha Finance (the team behind Babel Finance) and $53 million owed to VanEck’s New Finance Income Fund.

Genesis claimed in a press statement to have more than $150 million in cash, “which will provide ample liquidity to support its ongoing business operations and facilitate the restructuring process.”

The bankruptcy of Genesis may have broader implications for its parent company, Digital Currency Group, which is reportedly seeking additional funds. The firm is currently considering selling its crypto media publication CoinDesk, which has seen offers for over $200 million.

This is the latest in a series of bankruptcies that have hit the crypto industry including FTX, Three Arrows Capital, crypto broker Voyager Digital, crypto lenders Celsius Network and BlockFi.

Image: Pixabay

Show your support for our mission by joining our Cube Club and Cube Event Community of experts. Join the community that includes Amazon Web Services and Amazon.com CEO Andy Jassy, Dell Technologies founder and CEO Michael Dell, Intel CEO Pat Gelsinger and many more luminaries and experts.


Source link

Load More By Michael Smith
Load More In Technology
Comments are closed.

Check Also

Autocar magazine 1 February: on sale now

[ad_1] This week in Autocar, we put Porsche’s new 911 ‘SUV’ through its paces, break the s…