Cryptocurrency platform Genesis' lending units file for bankruptcy

By Ovunc Kutlu

ISTANBUL (AA) - Cryptocurrency platform Genesis' lending units filed for bankruptcy as the turmoil in crypto market continues after the implosion of FTX.

Genesis Global Holdco LLC and two of its lending subsidiaries -- Genesis Asia Pacific Pte. Ltd and Genesis Global Capital, LLC -- filed for Chapter 11 bankruptcy protection late Thursday in the bankruptcy court for the Southern District of New York.

"While we have made significant progress refining our business plans to remedy liquidity issues caused by the recent extraordinary challenges in our industry, including the default of Three Arrows Capital and the bankruptcy of FTX, an in-court restructuring presents the most effective avenue through which to preserve assets and create the best possible outcome for all Genesis stakeholders," Genesis Interim CEO Derar Islim said in a statement.

Although the company said it has over $150 million in cash on hand to provide liquidity, support its ongoing business operations and facilitate the restructuring process, it listed more than 100,000 creditors in its bankruptcy filing, in which liabilities range from $1.2 billion to as high as $11 billion.

Genesis Global Holdco LLC is the parent company of the crypto lender Genesis Global Capital, while it is owned by Digital Currency Group -- the owner of digital currency asset management firm Grayscale Investments that had around $50 billion funds under management in 2021.

Genesis' financial troubles echoes other crypto firms' financial struggles last year, which was dubbed as "crypto winter" and included FTX, Three Arrows Capital, Voyager, Celsius and BlockFi.