A committee of creditors presented a plan to address liquidity problems and provide a path to asset recovery.
In the wake of the issues currently plaguing the crypto market, genesis and its parent company Digital Currency Group (DCG), a committee of creditors, which includes cryptocurrency exchange Geminis, have unveiled a plan to address liquidity issues and provide a path to recovery. of assets.
Cameron Winklevoss, president and co-founder of Gemini, on the subject of Genesis and DCG recently said that “Houlihan Lokey has submitted a plan on behalf of the Creditors’ Committee to resolve Genesis and DCG’s liquidity problems, and provide a path for asset recovery.”
Cryptocurrency Firm Genesis and DCG Owe $900 Million
Genesis and its parent company DCG reportedly owe Gemini users $900 million.
Houlihan Lokey is a New York-based investment firm that specializes in advising creditors, having previously assisted in similar proceedings for Lehman Brothers and WorldCom.
Cameron Winklevoss tweeted the following:
“Earn Update: Today, Houlihan Lokey presented a plan on behalf of the Creditor Committee to resolve the liquidity issues at Genesis and DCG and provide a path for the recovery of assets.”
Users of the cryptocurrency exchange’s Earn service, which allows them to earn between 0.45% and 8% interest on their crypto, appear to have been unable to access their funds since November 16.
This was due to third-party contagion involving cryptocurrency broker Genesis, the main provider facilitating the service Win. Therefore, Genesis blocked withdrawals from it on the same day, citing the consequences of FTX’s collapse, as well as defining abnormal withdrawal requests.
Cryptoliquidity: The Problems of Other Exchanges in the Sector
The financial situation that currently affects DCG, and therefore, the Genesis cryptocurrency, has also had serious repercussions for other players in the sector.
For example, Dutch cryptocurrency exchange Bitvavo claimed to have 280 million euros ($297 million) “stuck” with Digital Currency Group. These activities, in fact, represent 17.5% of the total 1.6 billion euros ($1.69 billion) of exchange rights in deposits and other assets.
However, DCG has stated that the outstanding funds are instead held by its independent subsidiary, i.e. Genesis, and not DCG. Greyscale Capital, another branch of the DCG empire, faces significant financial stress, albeit for different reasons.
The Grayscale Bitcoin Trust, a popular fund that offers investors exposure to Bitcoin without having to hold or guard the asset, has reached historic discounts on the underlying asset. Thus, the trust is trading at a 47.54% discount to Bitcoin, according to YCharts.
Unfortunately, the Genesis cryptocurrency, like many others in the sector, appears to be at risk of bankruptcy, like FTX.
Further aggravating Genesis’s situation was the Wall Street Journal’s disclosure that Genesis had made loans to Alameda Research, the Bankman-Fried trading firm with a portfolio full of FTT, FTX’s token. In short, FTT collapses, and the loan to Alameda is at risk, and in turn, so it is Genesis.
By Audy Castaneda
