Genesis Global Holdco is the latest corporation to give in to pressure following the sharp collapse of FTX. The parent company of troubled cryptocurrency lender Genesis Global Capital on Thursday, January 19, filed for Chapter 11 bankruptcy protection at the United States Bankruptcy Court in the Southern District of New York.
Three Genesis firms file for bankruptcy
Declaring bankruptcy as well were its other subsidiaries, Genesis Asia Pacific and Genesis Global Capital. In its chapter 11 bankruptcy filing, the Genesis Global Capital firm noted it has listed more than 100,000 creditors in its “mega” bankruptcy case and that its total debts are between $1.2 and $11 billion. The assets and liabilities of the other two firms were assessed at $100 million and $500 million, respectively.
Genesis Global Holdco in its statement noted that it would take into account a sale or equitization arrangement to pay back its creditors and that it has $150 million in cash to help the restructuring process.
According to the press release, Genesis’ other businesses, including its derivatives and spot trading, Genesis Global Trading, and custody operations, are unaffected by the bankruptcy and will continue to provide their clients with the same level of service.
“We look forward to advancing our dialogue with DCG and our creditors’ advisors as we seek to implement a path to maximize value and provide the best opportunity for our business to emerge well-positioned for the future,” said Derar Islim, Genesis’s interim CEO.“
Genesis publishes a list of creditors
Publishing its claims, Genesis noted that the estimated total worth is over $3.6 billion. The list of creditors, which contained 50 unsecured claims was published after the company’s declaration of bankruptcy.
Most of the largest claims, including one for almost $500 million and another for $230 million, are made by entities whose names have been concealed. Someone who had knowledge of the situation claims that they largely belong to individual creditors.
The Genesis list of creditors includes lots of claims that involve well-known cryptocurrency companies. The largest claim, for $766 million, comes from Gemini Trust Company, which has been engaged in a public dispute with Genesis’ parent company, Digital Currency Group, for weeks.
A list of other notable claims includes: trading firm Cumberland DRW, which is owed $19 million; $30 million owed to a subsidiary of Abra, Plutus Lending; $53 million from VanEck’s New Finance Income Fund; $150 million to cryptocurrency lender Babel Finance, whose legal company name is Moonalpha Financial Services Limited; and $151 million to the cryptocurrency fund Mirana Corp.
Also with a claim of $55 million, a company named Heliva International Corp is on the list, with Santiago Esponda, Decentraland’s group CFO, identified as the company’s point of contact.
Winklevoss threatens to sue DCG’s CEO
Cameron Winklevoss has taken to Twitter to criticize Barry Silbert, the CEO of Digital Currency Group, saying that Gemini Trust Co. is considering “direct legal action” against him.
9/ This marks an important milestone in our efforts to help Earn users get their assets back. Doing so remains our highest priority.
— Cameron Winklevoss (@cameron) January 20, 2023
The Gemini Trust Co., and the Genesis Foundation have been engaged in a long-running dispute because of Earn, a cryptocurrency loan program which they used to run together.
Cameron and Tyler Winklevoss, who are the co-owners of Gemini Trust Co., noted that 340,000 Earn investors are owed more than $900 million by Genesis, and Cameron has also asked for the removal of Barry Silbert as the CEO of Digital Currency Group.
The United States Securities and Exchange Commission (SEC) charged both companies on January 12 with breaking securities laws by selling “Earn program securities” to investors without being properly registered.