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Genesis spells more doom for Cryptos

Genisis crypto crashes

One of the largest cryptocurrency lenders, Genesis, has declared bankruptcy in the US, making it the most recent victim of the crypto market crash.

Late on Thursday night in New York, Genesis Global Capital filed for Chapter 11 bankruptcy protection. According to a court filing, the lenders’ assets and liabilities are each estimated to be between $1 billion and $10 billion.

Genesis Global Holdco, the parent company, and Genesis Asia Pacific, a lending company, both filed for bankruptcy protection.

According to a statement from the corporation, “Genesis has taken proactive initiatives to reach a global settlement to maximize value for all clients and stakeholders and improve its business for the future.”

Genesis noted that Genesis Global Trading and its subsidiaries engaged in the derivatives, spot trading, and custody businesses were not included in the filing and will continue to operate.

Taxman ready to call on crypto investors

Following the shocking failure of FTX, Genesis stopped customer withdrawals in November. Since then, it has been in talks with creditors and working to raise new capital.

The Financial Times reported earlier this month, citing anonymous people familiar with the situation, that Genesis’s owner, Digital Currency Group, which is supported by investments from Softbank and Alphabet, has been investigating the sale of assets to pay back more than $3 billion due to creditors.

The Wall Street Journal claimed that the crypto lender fired 30% of its personnel earlier this month.

After the US Securities and Exchange Commission (SEC) accused the lender and cryptocurrency exchange Gemini of selling unregistered securities in connection with a high-yield product called Earn on January 12, Genesis filed for bankruptcy at a time when the company was already facing increased regulatory scrutiny.

The former Olympic rowers Cameron and Tyler Winklevoss’ Gemini is in a public battle with Genesis about the disposition of $900 million in assets that Gemini clients deposited with the lender.

Genesis’s bankruptcy is the most recent setback for the cryptocurrency industry, which is still reeling from FTX’s demise and Sam Bankman-arrest. Fried’s

SBF FTX CASE
SBF FTX CASE

In relation to the collapse of his crypto empire, Bankman-Fried, previously one of the most well-known figures in the industry, is accused with eight counts, including lying to investors and siphoning off billions of dollars in customer monies for personal use.

Bankman-Fried has entered a not guilty plea to all of the accusations, adamant that he did not take any money.

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