Bankruptcy Expected From Major Cryptocurrency Lender | Customer Redemptions Frozen

1 min read

 Customer Redemptions

A bankruptcy filing has been expected for weeks, after the company froze customer redemptions on Nov. 16 following the downfall of major cryptocurrency exchange FTX.

The collapse of FTX in November has claimed several victims including crypto lender BlockFi and Core Scientific Inc , one of the biggest publicly traded crypto mining companies in the United States, both of which filed for bankruptcy protection in the following months.

Genesis

  • Genesis Global Capital, a crypto lending platform owned by Digital Currency Group (DCG), is said to be considering filing for bankruptcy.
  • According to a Bloomberg report, Genesis is likely to file for bankruptcy this week.
  • Genesis paused customer withdrawals in November, with over $900 million owed to Gemini Earn customers alone.

Troubled crypto lender Genesis Global Capital is reportedly looking to file for bankruptcy, according to the latest cryptocurrency news around the platform.

Genesis is a subsidiary Digital Currency Group, DCG, a crypto company that has over the past few weeks been one of the main topics across Crypto Twitter for its role in the troubles that now beguile its crypto lending unit. DCG also owns Grayscale and crypto publication CoinDesk.

Bankruptcy

Indeed, as we recently reported, crypto exchange Gemini has accused DCG for the difficulty that it has faced since Genesis paused redemptions and loan originations in November last year. And the US Securities and Exchange Commission (SEC) has charged both Gemini and Genesis for violating the securities laws through the offerings linked to the Gemini Earn product.

Now, amid the liquidity crunch that’s bitten the company, the report is that Genesis could file for bankruptcy protection in the next few days. Sources cited in a Bloomberg report on Wednesday say the bankruptcy filing could happen before the end of the week.

Companies use Chapter 11 bankruptcy procedures as a platform that allows the embattled business time in which they can work towards salvaging assets and recouping value for creditors.

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