Crypto lender Genesis to file for bankruptcy this week: report

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Filed for bankruptcy this week

It was once again reported that Genesis Global Capital, a crypto asset (virtual currency) lending company, may file for bankruptcy.

Bloomberg, citing multiple sources, will file an application as early as this week, Bloomberg reported on Thursday. Affected by the FTX bankruptcy, Genesis suspended services such as redemptions and withdrawals in November, owing more than 386 billion yen ($3 billion) to creditors and the possibility of bankruptcy. Something has been said before.

Relation: Virtual currency giant DCG sells part of assets or subsidiary Genesis has debt of 388 billion yen = report

Regarding the bankruptcy filing, the virtual currency media “The Block” also reported on the 19th, citing two sources. Sources at The Block revealed that Genesis plans to file for pre-packaged bankruptcy under Chapter 11 bankruptcy.

What is Chapter Eleven

A reconstruction-type bankruptcy legal system similar to the Civil Rehabilitation Law of Japan. The company will be restructured by reducing debts while continuing to operate. Debt collection will be suspended after the application, and the debtor will work on debt consolidation and formulate a reconstruction plan within 120 days in principle.

▶Cryptocurrency Glossary

The prepackaged type is one of the means of applying for bankruptcy after agreeing in advance with creditors on a reconstruction plan. There are merits such as reducing the involvement of the court as much as possible and shortening the time required from the application of procedures to the approval of the reconstruction plan.

Sources said Genesis and creditors are currently negotiating the terms of a prepackaged bankruptcy filing. Creditors are expected to demand cash payments or a stake in Genesis parent company Digital Currency Group (DCG) in exchange for agreeing to extend the maturity of most debt by a year or two. be done.

Relation: DCG, a major virtual currency with liquidity problems, explains points about the impact on the market

Gemini joins talks

Creditors negotiating a bankruptcy filing include cryptocurrency exchange Gemini.

Gemini offers a yield service called Gemini Earn through Genesis. Due to Genesis’ suspension of services such as redemption, Gemini Earn’s redemption has been suspended since November last year.

Last December, the Financial Times reported that Genesis and DCG owed about ¥115 billion ($900 million) to Gemini. Gemini has formed a creditors committee and is in negotiations with both companies.

Relation: Genesis and DCG, debt of over 100 billion yen to Gemini = report

The U.S. Securities and Exchange Commission (SEC) filed a securities lawsuit against Gemini and Genesis earlier this month as Gemini Earn’s customers continue to be unable to redeem. Gemini Earn alleges that it constitutes an offering and sale of unregistered securities.

The SEC also notes that at the time the redemption was suspended in November, Genesis held assets worth $900 million from Gemini Earn’s 340,000 customers.

RelationSEC sues Gemini and Genesis for securities law violations

The post Crypto lender Genesis to file for bankruptcy this week: report appeared first on Our Bitcoin News.

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