Genesis in Chapter 11 Bankruptcy Protection

Blockonomi

Rumors about Genesis came to an official confirmation as the firm filed for chapter 11 bankruptcy protection on Tuesday. It appears that FTX contagion won’t stop, and Genesis bites the dust.

Crypto lender Genesis filed for bankruptcy under Chapter 11 on Jan. 19.

The United States District Court for the Southern District of New York will handle the company’s filing. With this move, Genesis joined BlockFi as one of prominent industry figures that were on the brink of insolvency following FTX’s collapse.

How To Get Free Crypto  

Another Crypto Collapse

The troubled lender said in court filings it had over 100,000 creditors and $1,2 billion to $11 billion in debts. Some of familiar names on the list are crypto exchange Gemini, Mirana Asset Management, Decentraland, VanEck’s New Finance Income, and trading giant Cumberland.

Genesis borrowed $765 million from Gemini and approximately $700 million from other two major creditors whose name remained anonymous, according to the filings.

For a business that is losing cash, the best option is to liquidate assets. But much of a business’s value is tied to intangible assets, such as the skills of its workforce or its relationships with suppliers and customers.

So the best way to get your money back is to sell the business or find a way to re-operate the business. That’s what Chapter 11 bankruptcy enables.

Coinbase Banner  

Genesis proposed a dual tracking process to maximize the creditor’s recovery. The business will begin the marketing and sales process to monetize GGH’s assets, with the profits of the deal being used to pay creditors fairly and equitably.

If the marketing and sale procedure fails, the creditors will obtain a stake in the reformed GGH. An independent special committee of the company’s board of directors will monitor all parts of the restructuring process.

Slow and Expensive

Genesis stated that it presently has more than $150 million in cash, which it can use to maintain ongoing business operations and facilitate restructuring.

In addition, the company has filed a number of additional standard court motions to allow normal business operations to resume.

FreeBitcoin Banner  

The decision seemingly came overnight but was completely foreseeable. The New York-based company has endured financial hardships since the collapse of Three Arrows Capital (3AC) in August 2022. The company had to cut off 20% of its workforce.

The crash of FTX later in November exacerbated the already rough operation. Genesis made crypto loans to its investment fund Three Arrows Capital (3AC) and Alameda Research, a hedge fund created by FTX’s previous CEO.

3AC declared bankruptcy in July 2022, just as cryptocurrencies were entering the crypto winter. Genesis previously loaned 3AC more than $2.3 billion.

Genesis Company has invested $2.5 billion in Alameda Research. After FTX declared bankruptcy in November, Genesis stated that around $175 million of the company’s funds were stranded on the exchange.

Following a failed attempt to finance $1 billion, an additional 30% layoff was carried out, but it was insufficient to keep the business solvent. Genesis has halted customer withdrawals, alleging a liquidity issue caused by the collapse of FTX.

Genesis is now negotiating with creditors represented by law firms such as Kirkland & Ellis and Proskauer Rose. However, Gemini, one of the company’s largest creditors, will almost certainly be obstructive.

Shortly after Genesis declared bankruptcy, Gemini co-founder Cameron Winklevoss tweeted that DCG CEO Barry Silbert continues to refuse to offer creditors fair settlements.

“Unless Barry and DCG come to their senses and make a fair offer to creditors, we will be filing a lawsuit against Barry and DCG imminently,” Winklevoss added, “This marks an important milestone in our efforts to help Earn users get their assets back. Doing so remains our highest priority.”

According to previous estimates, Genesis has owned Gemini’ customers $900 million. The two companies formed a strategic partnership to run the Earn Program but Genesis crashed the relationship after halting withdrawals in November.

Important Note: There have been reports of scammers approaching companies via Telegram, LinkedIn and Other Social platforms purporting to represent Blockonomi and offer advertising offers. We will never approach anyone directly. Please always make contact with us via our contact page here.

Go to Source
Author: Nicholas Say


Recommended Crypto Services, Products and Strategies:

The first thing any crypto investor needs is is a reliable and secure Crypto Wallet.  Whether you’re looking for an online wallet, hardware wallet, desktop or mobile wallet, Crypto Renegade provides you with all the Best Crypto Wallets in each category.

Best Crypto Wallets Banner

When you’re ready to buy more crypto, or exchange your coins for others, Crypto Renegade’s list of the Best Crypto Exchanges has you covered.  The Crypto Exchanges recommended here offer everything from simplicity and convenience to advanced trading platforms and profit sharing. 

Best Crypto Exchanges Banner

If you want to learn more about the methods and tools that can be used to find Great Crypto Projects, then be sure to check out Crypto Renegade’s strategy for How To Find The Best Cryptocurrency.

Crypto Strategy Banner

For those people that don’t have any money to invest right now, or just want to understand the technology a bit more, you’ll definitely want to check out Crypto Renegade’s Free Crypto Strategy and start collecting Free Coins today!

Free Crypto Banner

What do you think about cryptocurrency? Do you have any questions about it? Be sure to leave a comment below.

This site uses Akismet to reduce spam. Learn how your comment data is processed.