Key points to remember:
- Genesis has filed for bankruptcy, citing the collapse of 3AC and FTX as the culprit
- The company will use $150 million of its available cash to fund the ‘restructuring process’
- Genesis owes $3.5 billion to its top 50 creditors alone
The Collapse of Crypto Exchange FTX Sealed the Fate of Genesis
Genesis, a cryptocurrency lending and trading platform, filed for Chapter 11 bankruptcy on Thursday. According to a Press releasethe company plans to restructure its business to “maximize value for all customers and stakeholders”.
Genesis’ parent company, Digital Currency Group (DCG), was reportedly in contact with creditors for some time before the formal start of the bankruptcy process, trying to reach a “holistic solution” that would be an “optimal outcome.” ” for Genesis customers and Gemini Earn users. .
Genesis outlined its path forward in the following statement:
“As part of its Chapter 11 filing, Genesis has proposed a roadmap to an exit including a Chapter 11 plan (the “Plan”) that calls for a framework for comprehensive resolution of all claims through and the creation of a trust which will distribute the assets to the creditors.
“The plan envisions a two-track process in pursuing a sale, capital raising and/or equity transaction that would allow the company to emerge under new ownership,” Genesis added.
The reason for the bankruptcy is rooted in the “extraordinary challenges” the company has faced in recent months. First, the insolvency of cryptocurrency hedge fund Three Arrows Capital, which significantly affected Genesis’ financial situation. However, the final nail in the coffin was the bankruptcy of FTX, according to the press release.
At the time of filing, the company had $150 million in cash, which it plans to use to fund the “restructuring process.”
According to the bankruptcy filing, the total assets and liabilities between Genesis and its subsidiaries are estimated to be between $1 billion and $10 billion. Following the filing, Coinbase reported that Genesis owed up to $3.5 billion to its top 50 creditors.
David is a crypto enthusiast and personal finance expert. He has created numerous publications for different platforms. He loves exploring new things, and that’s how he discovered blockchain in the first place.