It looks like Genesis Global Capital, the lending arm of Digital Currency Group, could be facing some challenges in the near future. According to insiders, the company is preparing for the possibility of filing for bankruptcy as soon as this week. This is due to the fact that they have been in confidential negotiations with various creditor groups as they face a liquidity crunch. The company has warned that it may need to file for bankruptcy if they are unable to raise cash.
Three Arrows Capital & Genesis Global Capital
It seems that the financial pressure on Digital Currency Group, led by Barry Silbert, began to emerge after the collapse of the hedge fund Three Arrows Capital. As a result, Genesis suspended withdrawals in November, and crypto exchange FTX, where Genesis held some of its funds, filed for bankruptcy. This has had an impact on the crypto exchange Gemini Trust, run by the Winklevoss twins. The Gemini Earn service, which allowed users to lend out their coins through Genesis, also stopped redemptions.
Creditors, Genesis, and Digital Currency Group have exchanged several proposals but have so far been unable to come to an agreement. The company is working towards a restructuring plan and has swapped proposals with its creditors, some of whom have suggested receiving a mix of cash and equity from Digital Currency Group.
In an effort to conserve cash, Digital Currency Group has informed shareholders that they are suspending quarterly dividends. Furthermore, DCG property CoinDesk, a crypto news site, has confirmed that they have engaged Lazard as a financial advisor to explore options, including a partial or full sale.
In summary, Genesis Global Capital is in a difficult position, and crypto enthusiasts should keep an eye on the situation as it develops. It is important to remember that talks are ongoing, and plans could change.