Genesis prepares for bankruptcy
Genesis, the crypto lending service, is likely to file for bankruptcy this week.
Genesis, the crypto lending service, is expected to file for bankruptcy this week. Bloomberg reports, citing "people close to the situation."
According to the report, the Digital Currency Group's (DCG) subsidiary had confidential talks with several creditors and warned of a possible bankruptcy. Genesis and DCG's creditors had exchanged proposals, but so far no agreement. "The talks are ongoing and plans could still change," said the people familiar with the matter. The quarterly dividends of DCG are also being suspended, the crypto firm said in a January 17 shareholder letter obtained by Bloomberg News. DCG says its focus is on "strengthening the balance sheet by cutting operating costs and preserving liquidity."
If Genesis were to go bankrupt, roughly $350 million would be owed to parent DCG. Recently, the SEC has sued both Genesis and Gemini for unregistered securities trading.
The Earn program, where the fiasco began, was terminated due to the dispute between the companies. A total of $900 million from Gemini remains with Genesis after withdrawals were frozen. It remains to be seen whether creditors will get their frozen assets back, at least partially, in the wake of the now-possible bankruptcy.
Gemini co-founder Cameron Winklevoss recently called on DCG CEO Barry Silbert to step down.
