- Genesis Trading declared bankruptcy after incurring catastrophic losses due to the broader crypto market collapse.
- The bankruptcy filing has identified $1.2 to $11 billion in total liabilities and 100,000 creditors.
- Cameron Winklevoss has threatened to sue Barry Silbert.
Late Thursday night, the cryptocurrency lending firm Genesis filed for Chapter 11 bankruptcy in Manhattan federal court, becoming the latest victim of the industry contagion triggered by the collapse of FTX. According to the bankruptcy filings, the corporation has between $1.2 to $11 billion in total liabilities and has identified over 100,000 creditors in a “mega” bankruptcy case.
Also filing for bankruptcy were Genesis Asia Pacific and Genesis Global Holdco, the parent company of Genesis Global Capital. In a statement, Genesis Global Holdco said it has $150 million cash to support the restructuring process and would consider a sale or equitization deal to pay creditors.
The statement clarified that Genesis’s other companies, including its derivatives and spot trading, broker-dealer, and custody activities, are unaffected by the bankruptcy and will continue serving their customer base as usual.
“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.
Meanwhile, Cameron Winklevoss has called out Silbert on Twitter, stating that Gemini Trust Co was looking to take “direct legal action” against Silbert.
“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 wrote.
The Genesis Foundation has been involved in an ongoing feud with Gemini Trust Co, founded by Cameron and Tyler Winklevoss. These firms have been at odds over a cryptocurrency loan product called Earn.
The Winklevoss brothers have claimed that Genesis owes over $900 million to 340,000 Earn investors. Cameron Winklevoss has also demanded that Barry Silbert be removed as CEO of Digital Currency Group.
On January 12th, the U.S. Securities and Exchange Commission accused Genesis and Gemini of violating securities laws for marketing Earn program securities to investors without proper registration. The complaint was unsatisfactory, according to Tyler Winklevoss.
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