Genesis Global Files For Chapter 11 Bankruptcy in New York

  • The report comes just two days after the rumor was first made public.
  • Genesis has $175 million of its own stranded on FTX.

Genesis Global, a cryptocurrency lender, officially filed for Chapter 11 bankruptcy in the United States Bankruptcy Court for the Southern District of New York on January 19. The failure of cryptocurrency exchange FTX has resulted in a slew of bankruptcies, the most recent of which being Genesis.

It’s also a huge setback for Barry Silbert’s Digital Currency Group, which has been having a rough go of it as of late. Moreover, the report comes just two days after the rumor was first made public.

Domino Effect Continues

The collapse of the cryptocurrency exchange FTX has caused Genesis to experience large withdrawals and liquidity concerns. Furthermore, Genesis has $175 million of its own stranded on FTX after the cryptocurrency exchange crashed and filed for bankruptcy.

Earlier last month, Genesis stopped processing withdrawals, putting key customer Gemini in a bind. With Chapter 11 bankruptcy, Genesis Global has presented an exit strategy that establishes a global settlement and trust structure for the distribution of assets to creditors.

Genesis’s independent director Paul Aronzon stated:

“We have crafted a deliberate process and roadmap through which we believe we can reach the best solution for clients and other stakeholders. We look forward to advancing our dialogue with DCG and our creditors’ advisors as we seek to implement a path to maximize value and provide the best opportunity for our business to emerge well-positioned for the future.”

Genesis, a crypto lender, is in talks with its creditors at the moment, but the talks haven’t led to an accord just yet. The cryptocurrency lender has reserves of about $150 million.

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Content writer by profession. A crypto lover and has passion for writing. Follows the developments of digital currency right from its launch, years ago.