• Genesis Global Capital, a subsidiary of crypto conglomerate Digital Currency Group, is reportedly preparing to file for bankruptcy as early as this week.
• The report follows the United States Securities and Exchange Commission charging Genesis and crypto exchange Gemini with offering unregistered securities through Gemini’s „Earn“ program.
• Cameron Winklevoss has also released several open letters through social media calling out Digital Currency Group CEO Barry Silbert, claiming Genesis owed Gemini $900 million for funds Gemini lent to it as part of the same program.
Cryptocurrency lending firm Genesis Global Capital is preparing to file for bankruptcy in the near future, according to a report from Bloomberg. The filing could come as soon as this week and is due to the liquidity crunch Genesis is currently facing, similar to that encountered by crypto exchange FTX before their Chapter 11 filing in November.
The filing comes on the heels of the United States Securities and Exchange Commission charging both Genesis and crypto exchange Gemini with offering unregistered securities through Gemini’s „Earn“ program. This case is still ongoing and has led to open letters from Gemini co-founder Cameron Winklevoss calling out Digital Currency Group CEO Barry Silbert, claiming Genesis owed Gemini $900 million for funds Gemini lent to it as part of this program. Digital Currency Group responded to these allegations by calling them „malicious, fake, and defamatory attacks“.
The potential bankruptcy filing from Genesis Global Capital could have far reaching implications for the crypto industry as a whole, especially given the company’s ties to Digital Currency Group. Digital Currency Group is one of the largest firms in the cryptocurrency space and has stakes in companies such as Coinbase, Ripple, and BlockFi. Should Genesis be unable to weather this current storm, it could have ripple effects throughout the industry.
At this time, it is unclear how exactly the bankruptcy filing will pan out and what the ramifications will be. It is possible that Genesis may be able to find a way to restructure its debt and avoid bankruptcy altogether, or they may be able to find a buyer for their assets. Whatever the outcome, it is sure to have an impact on the industry as a whole.