Genesis Global is the latest casualty of the crypto market
Wall Street Journal (WSJ) has reported that Genesis Global Trading may be filing for chapter 11 of the US bankruptcy protection code within days. Bloomberg News confirmed this, citing people with knowledge of the company’s activities.? Earlier this month, Genesis terminated 30 percent of its workforce. The company said that it has to “navigate unprecedented industry challenges.” It is reported that the company is working with the investment bank Moelis & Co.
the whole crypto space bores me now. I made my money in bitcoin and got out in late 2020. I have never looked back since. Forget me on crypto, says a seasoned US investor and venture capitalist.
Background
Genesis was one of the largest crypto lenders but recently faced a problem of liquidity as a result of the collapse of? FTX.? Genesis is a subsidiary of venture fund Digital Currency Group.? It was established as the bitcoin trading division of SecondMarket owned by Barry Silbert.
The New York Department of Financial Services issued Genesis with a ′Bitlicense′ and this allowed the company to trade in bitcoin, ethereum, ripple, litecoin and zcash.?
Singapore-based Three Arrows Capital (3AC) and Alameda Research, a crypto hedge fund and subsidiary company of FTX, owed Genesis Global hundreds of millions of dollars according to WSJ.? It is reported that the company began to struggle with liquidity problems prior to the FTX collapse when it failed to acquire funding required of US$1 billion to keep afloat.
Withdrawals to customers stopped
Genesis stopped its customer withdrawals on 15 November after its failure to raise funds. Many sector specialists say that the “writing was on the wall”.? According to a report in the Financial Times, total liabilities of Genesis Global exceed US$3 billion.? Multinational top tier law firm Proskauer Rose is representing a group of creditors.
The crypto market
Considering that Genesis and Digital Currency Group are very influential in the crypto market, this situation has the potential to push crypto prices even lower.? SiGMA News spoke with a seasoned US investor and venture capitalist who asked for anonymity. He said “the whole crypto space bores me now. I made my money in bitcoin and got out in late 2020. I have never looked back since. Forget me on crypto.”
