Crypto Lender Genesis Files for Bankruptcy as FTX Contagion Spreads
Genesis, a crypto lending platform owned by venture capital firm Digital Currency Group, joined crypto firm BlockFi in filing for bankruptcy, the latest crypto company to go belly-up amid allegations of fraud after the collapse of FTX late last year.
Genesis has been in dispute with crypto exchange Gemini, founded by the Winklevoss twins, which says it owes about $900 million to Gemini customers because of the lending product called Earn. Earn program allowed Gemini users to generate yields by lending their crypto assets to a borrowing counterparty. Genesis said in its filing with the U.S. Bankruptcy Court for the Southern District of New York that it had both assets and liabilities in the range of $1 billion to $10 billion and said it might have more than 100,000 creditors.
The filing includes the parent company Genesis Global Holdco and two of its lending business subsidiaries, Genesis Global Capital and Genesis Asia Pacific. The parent company has over US$150 million in cash, which it plans to use to support its ongoing operations and restructuring process.
Digital Currency Group (DCG), the parent company of Genesis, has invested in crypto exchanges Coinbase and Kraken, along with the Circle, which runs the stablecoin USDC, and blockchain analytics companies Chainalysis, Dune Analytics, Elliptic, and Etherscan.
DCG subsidiaries also include online crypto news outlet CoinDesk, which this week said it hired Lazard to explore a potential sale.CoinDesk broke the news that led to the collapse of FTX.
DCG also owns Grayscale Investments, whose Grayscale Bitcoin Trust (GBTC) is the world's largest bitcoin fund. In November, DCG said turmoil in Genesis' lending operations had no impact on DCG, and its subsidiaries and
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