Another day, another crypto firm goes under: Genesis files for bankruptcy

Another day, another crypto firm goes under: Genesis files for bankruptcy

The cryptocurrency lending company, Genesis, has filed for Chapter 11 bankruptcy in New York. The entities that have specifically filed include Genesis Global Holdco, LLC, Genesis Global Capital, LLC, and Genesis Asia Pacific Pte. Ltd. Other subsidiaries of the company that are involved in derivatives, spot trading, and custody, as well as Genesis Global Trading are not included and continue to offer services for users.

With the company’s bankruptcy, it means that "redemptions" and "new loan originations" will remain suspended but clients will be able to put in claims to retrieve their assets through the bankruptcy process. In its FAQ, Genesis said that it will create a customary claims process for its creditors while lending clients will get information from the company’s claims and noticing agent Kroll, which the claims process.

The company said it will advance through the Chapter 11 process as fast as it can but gave no definitive outline. Genesis said that the process would allow creditors to become “owners in the business, which would enable our lending business to emerge under new ownership.”

Genesis is a subsidiary of the Digital Currency Group which is also the owner of the largest digital currency asset manager, Grayscale, and the crypto news website CoinDesk, among other crypto companies. In a statement on Twitter, DCG said that it would continue operating as normal and so would its other subsidiaries including Genesis’ spot and derivatives trading businesses, as mentioned previously.

DCG said that it owes Genesis Capital $526 million, which is due in May and $1.1 billion under a promissory note that’s due in June 2032. DCG said it “intends” to meet these obligations through the course of Genesis Capital’s restructuring process.