Lender Genesis files for Cryptocurrency

Lender Genesis files for Cryptocurrency: Crypto News

Digital Currency Group’s (DCG) subsidiary Genesis Global Holdco LLC, which is in the prime brokerage business, said on Friday that it had voluntarily filed for bankruptcy in the United States. Read on to know more in detail to have an overall Golden Profit!

Due to their involvement in the company’s lending soperations, Genesis Global Capital LLC and Genesis Asia Pacific Pte. Ltd. are debtors in the bankruptcy case.

But an announcement from the company says that “other subsidiaries involved in derivatives, spot trading, and custody businesses, as well as Genesis Global Trading, are not part of the filing and will continue to trade with clients.” Genesis Global Trading is not part of the filing.

Derar Islim, Genesis’s interim CEO, said that the company was trying to “fix liquidity issues” before it went out of business.

These problems were the same ones that brought down the cryptocurrency exchange FTX and the cryptocurrency hedge fund Three Arrows Capital (3AC). Islim got the job in August of the year before.

Genesis says the company has more than $150 million in cash, which “will give it enough money to keep running its operations and make the restructuring process easier.” All of the documents that the bankruptcy court needed have been sent, so the business can go on as usual. 

People who think Gemini is an excellent place to invest

Genesis says it will keep talking with its creditors and its parent company, DCG, as part of a process to restructure the court is watching that. It does this to find “a full answer for its lending business.” If this is done, Genesis customers and Gemini Earn users will benefit.

Cameron Winklevoss, who helped start Gemini, said on Twitter on Friday that Genesis’s decision to file for bankruptcy is “an important step” toward giving customers their investments back.

Still, he said, “The decision to put Genesis into bankruptcy doesn’t absolve Barry Silbert, DCG, or any other wrongdoers of blame.” He kept talking after that: In our opinion, people who gave money to Genesis, DCG, and Barry deserve more than their money back.

The co-founder of Gemini said that this should happen in bankruptcy court. Visit Bitcoin Smart for Cryptocurrency Trading and Investment.

You may also like: Busting Common Myths About Cryptocurrencies

More and more people are using virtual money

Genesis lent money to cryptocurrency hedge funds and businesses that did business over the counter. But because of bad bets, the company lost a lot of money in 2018, and withdrawals had to stop on November 16.

3AC filed for bankruptcy in July, when the “crypto winter” was at its worst. Court documents say that Genesis lent 3AC more than $2.3 billion in loans. Creditors of 3AC have been fighting in court to get even a tiny amount of the billions of dollars that the hedge fund used to have back.

On the other hand, one of the main reasons why FTX failed, in the end, was because of Alameda. Bankman-Fried has said more than once that he doesn’t know of any fraud in his network of companies, but he hasn’t been able to explain the big hole that’s worth billions of dollars.

He was caught in December but could stay out of jail until his trial in October because his bail was set at $250 million.

Genesis was willing to risk $2.5 billion on Alameda, but that risk was gone in August. In November, when FTX stopped doing business, Genesis said that about $175 million worth of assets on FTX’s platform were “frozen.”

Genesis’ money problems have shown how big Silbert’s DCG empire is. Because 3AC failed, the parent company had to pay off Genesis’s $1 billion debt. In a later letter to investors, Silbert said that Genesis had given DCG an extra $575 million loan on top of what they already had from Genesis for unclear investment reasons.

One of the first companies to set up trusts that could be bought and sold on the stock market was DCG. Over the past year, fewer people trusted Grayscale Bitcoin Trust, which caused the company’s net asset value to drop significantly.