Alex Dovbnya
Genesis Global Capital is navigating a precarious financial situation, with looming bankruptcy as the likely outcome unless it secures the liquidity necessary to stay afloat
Bitcoin, the largest cryptocurrency, is trading in the read as the crypto sector faces another high-profile bankruptcy.
Under mounting pressure and amid lengthy confidential negotiations with creditors, cryptocurrency lending giant Genesis Global Capital is reportedly preparing for a possible bankruptcy filing, according to a Bloomberg report.
According to sources familiar with the matter, Barry Silbert’s Digital Currency Group (DCG) subsidiary has informed groups of creditors that it urgently needs to raise cash to avoid such a scenario. According to the report, however, a bankruptcy filing appears imminent at this point.
Discussions between DCG and creditors have not yet brought any significant progress. It is understood that leading Wall Street law firms such as Kirkland & Ellis and Proskauer Rose are currently consulting with creditors. Representatives from DCG and Genesis Global Capital are not responding to requests for comment.
Genesis came under scrutiny after its payouts were abruptly suspended on November 16th. This came almost immediately after crypto exchange FTX filed for bankruptcy earlier this month.
The shockwaves quickly spread across the broader crypto industry, impacting the Gemini exchange run by Cameron and Tyler Winklevoss. Gemini had to shut down its Gemini Earn program as creditors were unable to receive their money. The matter became the subject of a public dispute between the Winklevoss twins and Silbert.
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