### About two months after ‘pausing’ customer redemptions (withdrawals), Genesis files for bankruptcy. Reuters reported that Genesis owes creditors $3.4B based on its calculations from the bankruptcy filing. 

Genesis Global Capital is part of the Digital Currency Group (DCG), and one of the largest crypto lenders in the industry. 

The bankruptcy filing is not a surprise as Bloomberg had reported just about two days ago that the bankruptcy filing of Genesis is imminent. As regards the potential fallout from the bankruptcy, the effect could potentially be muted compared to other recent bankruptcy filings. 

The customer/creditor accounts have been ‘paused’ for about two months already, so there would be less surprise. Those customers/creditors who were holding on to hope that some funds stuck in Genesis would be accessible soon will have to accept that funds are not forthcoming as bankruptcy proceedings take time. 

In recent weeks, Cameron Winklevoss, on behalf of the customers of his exchange, Gemini, had been publicly pressuring Barry Silbert the founder and CEO of Genesis’ parent company, DCG to present a clear plan of action. 

Cameron also mentioned that Gemini and its ‘earn’ customers are owed around $900M by Genesis. Cameron stressed that the ‘earn’ customers are regular people who trusted Barry. 

Cameron also accused Barry of fraud for having made it appear that the balance sheet of Genesis was restored after having suffered a huge loss when another Crypto lender, Three Arrows Capital Fell. 

Cameron argued that DCG did not actually restore any liquidity to Genesis but instead simply issued a long-term promissory note to Genesis. DCG is also under Federal Investigation that appears to be focused on related-party transactions, between parent company DCG and Genesis.

About two months after ‘pausing’ customer redemptions (withdrawals), Genesis files for bankruptcy. Reuters reported that Genesis owes creditors $3.4B based on its calculations from the bankruptcy filing. 

Fri Jan 20 2023

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Fri Jan 20 2023

Genesis Files for Bankruptcy; Has $3.4B in Debt