On the brink of collapse: Genesis to file for bankruptcy within days
Crypto lender Genesis has sustained significant losses as a result of loans made to collapsed cryptocurrency startups Alameda Research and Three Arrows Capital.
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Genesis is owned by the crypto conglomerate Digital Currency Group. (Bloomberg News)
Cryptocurrency lender Genesis Global Trading Inc. is planning to file for bankruptcy within the next few days, as per people familiar with the matter.
Genesis, which is controlled by the crypto conglomerate Digital Currency Group, is in the last stages of preparing paperwork before filing for chapter 11 bankruptcy protection, the same sources stated.
The crypto lender has been contemplating bankruptcy for months, and the company laid off 30% of its workforce earlier this month to "handle unprecedented industry obstacles," as per a company representative.
Genesis is one of many digital asset enterprises fighting to stay afloat after digital currency prices dropped last year. The lender experienced significant losses as a result of loans it made to the now-defunct trading business Alameda Research and the crypto hedge fund Three Arrows Capital, both of which declared bankruptcy last year.
It is worth noting that Genesis has been engaging with investment bank Moelis & Co. to assess its future alternatives, including a possible chapter 11 petition. Genesis and DCG representatives did not immediately reply to calls for comment. Moelis did not respond right away, the Wall Street Journal reported.
Crypto asset manager Grayscale Investments, crypto news site CoinDesk, mining and staking firm Foundry, crypto exchange Luno, data platform TradeBlock, wealth management firm HQ, and DCG Real Estate are all part of Digital Currency Group.
DCG CEO Barry Silbert said as quoted by the Wall Street Journal last week that the company owes Genesis $447.5 million in US cash and 4,550 bitcoins worth around $78 million.
