Digital Currency Group (DCG) subsidiary Genesis has finally filed for Chapter 11 bankruptcy in the Southern District of New York (SDNY) court late Thursday night.
The platform was engaged in a series of confidential negotiations with several creditor groups for weeks amid a liquidity crunch.
- According to the latest reportGenesis Global Holdco and two of its lending business subsidiaries – Genesis Global Capital and Genesis Asia Pacific – have filed voluntary petitions under the bankruptcy code for SDNY.
- The official press release stated,
“Genesis’s other subsidiaries involved in the derivatives and spot trading and custody businesses and Genesis Global Trading are not included in the filing and continue client trading operations.”
- Genesis Global Capital, which happens to be the partner firm to Gemini’s recently-obsolete Earn program, roughly has over 100,000 creditors with liabilities and assets around $1 billion and $10 billion.
- The estimated assets and liabilities of the two lending subsidiaries stand within the range of $100 million and $500 million, respectively.
- The does filing not include other subsidiaries of Genesis that are engaged in the derivatives, spot trading, and custody businesses.
- Furthermore, Genesis Global Trading was absent in the bankruptcy filing and continue client trading functionings.
- The court document revealed that Genesis Global Capital plans to use the money left to compensate unsecured creditors with the help of the restructuring process.
- Its press release stated that Genesis has more than $150 million in cash on hand, which is expected to provide “ample liquidity” necessary to continue its ongoing business operations as well as to facilitate the restructuring process.
- The development comes just a day after fresh bankruptcy concerns surfaced amid attempts for funding.
- Genesis slashed 30% of its staff earlier this year after taking two major financial hits, first from the implosion of crypto hedge fund Three Arrows Capital (3AC) and the collapse of crypto exchange FTX.