Genesis Global Holdco, LLC — the parent company of Genesis Global Capital, whose lending arm has suspended withdrawals, filed bankruptcy law 11 in New York federal district court late Jan. 19. (Chapter 11).
The company is believed to have assets of $100 million to $500 million, liabilities of $100 million to $500 million, and up to 50 creditors. Its subsidiary, Genesis Global Capital, Genesis Asia Pacific Pte. Ltd., has also filed for bankruptcy.
These companies were involved in Genesis’ crypto lending business, which was heavily impacted by the collapse of hedge fund Three Arrows Capital and crypto exchange FTX. Another subsidiary involved in derivatives, spot trading and custody business, Genesis Global Trading, was not included in the bankruptcy filing and continues trading operations, according to the release.
Since the collapse of cryptocurrency exchange FTX in November, Genesis has been busy raising new capital and dealings with creditors. The company’s institutional lending division was forced to suspend client withdrawals and new loans. In addition, parent company Digital Currency Group (DCG) is under pressure to secure $900 million in deposits. Late last year, Genesis turned to investment bank Moelis & Co. to help it weigh its options.
Earlier this month, Genesis announced layoffs of 30% of its workforce. A $2.4 billion loan to Three Arrows was uncollectible.
Bankruptcy filing could affect Bitcoin (BTC). Both Genesis and cryptocurrency manager Grayscale are part of the Digital Currency Group (DCG). Grayscale operates the Grayscale Bitcoin Trust (GBTC), which has over $10 billion in assets under management. At the end of last year, GBTC had a record discount rate, but recently the range has narrowed.
There are also concerns that GBTC’s 600,000-plus bitcoin holdings will be liquidated in some way as a result of Genesis’ bankruptcy filing.
DCG is also the parent company of CoinDesk.
｜Translation: coindesk JAPAN
｜Editing: Takayuki Masuda
| Image: Genesis Trading, modified by CoinDesk
｜Original: Genesis Global Files for Bankruptcy Protection
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