Looks like Genesis Global Capital is feeling the heat, but they’re not sweating it too much. The crypto lender is currently in the middle of resolving disputes with creditors and is aiming to emerge from Chapter 11 by late May. Genesis, which is owned by Barry Silbert’s venture capital firm Digital Currency Group, filed for bankruptcy protection on January 19th, two months after freezing customer withdrawals due to the collapse of Sam Bankman-Fried’s FTX exchange. They’re not alone in this struggle, as other crypto lenders like Celsius Network, Voyager Digital, and BlockFi have also filed for bankruptcy since last July.
Bankrupt Crypto Lender Genesis Keeping It Positive
The lawyer for Genesis, Sean O’Neal, is keeping a positive attitude and believes they can resolve the disputes with creditors this week. U.S. Bankruptcy Judge Sean Lane also granted Genesis a series of “first-day” motions, including the ability to pay employees and critical vendors. But, in order to protect customers’ privacy, the judge ruled that Genesis doesn’t have to reveal customer names in its lists of creditors.
It plans to sell various assets at auction and exit bankruptcy by May 19th. They’ve reported over $5 billion of assets and liabilities, and estimates to owe over 100,000 creditors at least $3.4 billion. However, this bankruptcy does not include Digital Currency Group (DCG) or Genesis’ derivatives, spot trading, custody, and brokerage businesses.
Silbert & The Winklevoss Twins Are In A Pickle
This situation has put Genesis’ owner, Barry Silbert, in a pickle with identical twins Cameron and Tyler Winklevoss. The Winklevosses run the crypto exchange Gemini, which is Genesis’ largest creditor and is owed $765.9 million. On January 12th, the U.S. Securities and Exchange Commission charged Genesis and Gemini with illegally selling unregistered securities through their Gemini Earn lending product. The Winklevosses have called for Genesis to repay the $900 million of assets owed to about 340,000 Earn investors and for Silbert’s removal.
The crypto world can be tricky, but it looks like the crypto lender and its creditors are working together to find a solution and move forward. Let’s see if they can make a comeback by May 19th.
