Genesis joins other crypto lending platforms, in the context of a long-running crypto winter.
Saddled with huge debts, including $900 million to cryptocurrency exchange Gemini, cryptocurrency lending platform Genesis officially files for bankruptcy.
In a press release, Genesis indicates that it has entered into a Chapter 11 restructuring in order to “advance ongoing discussions with stakeholders and optimize results for Genesis clients and Gemini Earn users.”
Chapter 11 protects a company from its creditors during a bankruptcy filing and restructuring proceeding to save the company from total liquidation.
To avoid bankruptcy, Genesis interim CEO Derar Islim had recently asked his clients for more time to find a solution.
Thus, Genesis joins other crypto lending platforms, such as the Celsius Network, BlockFi, or Voyager Digital, which have also filed for bankruptcy in recent months, against the backdrop of a long-running crypto winter.
In its announcement, Genesis mentions a restructuring plan aimed at finding a solution that could result in a sale, capital increase, and/or shareholding.
Genesis Announcement Highlights
As part of its Chapter 11 filing, Genesis has proposed a roadmap for an exit that includes a Chapter 11 plan (the “Plan”) that calls for a framework for the comprehensive resolution of all claims and the creation of a trust. distribute the assets. to creditors.
The plan envisions a two-way process in seeking a sale transaction, capital increase, and/or shareholding that would allow the company to emerge under new ownership.
The company will initiate a marketing and sales process to monetize GGH’s assets or otherwise raise capital, using the transaction proceeds to pay creditors fairly and equitably.
If the marketing process does not result in a sale or capital increase, creditors will receive shares in the reorganized GGH. reads the Genesis press release.
It remains to be seen now what is the exact amount of Genesis’s debts, which is estimated between 1 and 10 billion dollars, according to the documents presented by the bankrupt crypto company.
Derar Islim Tweeted, then Deleted Account
Derar Islim, interim CEO of Genesis, who recently deleted his Twitter account, stated the following:
“While we have made significant progress in refining our business plans to address liquidity concerns caused by recent extraordinary challenges in our industry, including the default of Three Arrows Capital and the bankruptcy of FTX, a restructuring in court presents the most effective route by which to preserve assets and create the best possible outcome for all Genesis stakeholders. We deeply appreciate our clients’ continued patience and cooperation as we work to find an equitable solution.”
All eyes are now on the Price of Bitcoin (BTC), which could be affected to the downside by the bankruptcy announcement of Genesis, a subsidiary of Digital Currency Group (DCG), also Grayscale’s parent company.
By Audy Castaneda
