The cryptocurrency brokerage Genesis has submitted its bankruptcy paperwork.
When the FTX exchange went out of business at the end of 2022, it was the last straw for the company’s crypto lending business.
Genesis, a leader in the industry and a prime broker for digital currencies, filed for bankruptcy in the US on Thursday night. It is the third big crash in the crypto industry since the beginning of 2018.
In Manhattan federal court, Genesis Global Holdco and its subsidiaries, Genesis Asia Pacific Pte. and Genesis Global Capital, filed three different petitions. Digital Currency Group (DCG), which also owns the cryptocurrency news site CoinDesk, is in charge of all three.
DCG said in a statement that the three companies were only involved in Genesis’ crypto lending business.
Court documents show that when Genesis filed, it listed more than 100,000 creditors whose total debts ranged from $1.2 billion to $11 billion.
Genesis interim CEO Derar Islim said, “We look forward to moving forward with our talks with DCG and our creditors’ advisors as we try to find a way to maximise value and give our business the best chance to be well-positioned for the future.”
Genesis Global Capital, one of the biggest crypto lenders, stopped customers from getting their money back in the middle of November. This was because the bankruptcy of crypto exchange FTX sent shockwaves through the whole market. Genesis is said to have put about $175 million into the now-defunct company.
The statement says that Genesis Global Holdco will think about a possible sale or an equitization transaction to pay its debts. The company also said that it had $150 million in cash to help pay for the reorganisation.
Genesis stated in its bankruptcy filing that Gemini had provided it with a $765,9 million loan. Other big claims were a $78 million loan from the decentralised platform Donut and a $53.1 million loan from a VanEck fund.
