ErrorException Message: WP_Translation_Controller::load_file(): Argument #2 ($textdomain) must be of type string, null given, called in /homepages/21/d4297005900/htdocs/wordpress/wp-includes/l10n.php on line 838 The Fall of Genesis: Crypto Lending Unit Seeks Bankruptcy Protection - CAPITAL CHAMPS
The Fall of Genesis: Crypto Lending Unit Seeks Bankruptcy Protection

The Fall of Genesis: Crypto Lending Unit Seeks Bankruptcy Protection

The Fall of Genesis: Crypto Lending Unit Seeks Bankruptcy Protection

On Thursday, the lending side of Genesis, a leading The Truth about Cryptocurrency Everybody Should Know“>crypto unit, filed for bankruptcy protection in the United States. This was due to the recent market downturn, similar to the struggles faced by other companies like FTX and BlockFi. Genesis Global Capital, which is one of the biggest crypto lending companies, stopped allowing customers to take out their money on November 16th. This was after FTX, another company, had to file for bankruptcy, causing worry that other businesses in the same industry may also face difficulties. Digital Currency Group (DCG) owns Genesis.

The parent company of Genesis Global Capital, Genesis Global Holdco, has applied for bankruptcy protection. They have stated that they had over 100,000 creditors and assets worth between $1 billion and $10 billion. They also submitted a bankruptcy petition for Genesis Asia Pacific, another loan division. According to the corporation, options like selling the business or using equity to settle debts are being considered. They have $150 million in cash on hand to help with the reorganization.

Genesis has filed for bankruptcy, but some of its business operations, such as derivatives and spot trading, broker-dealer, and custody, will not be affected and will continue to serve their clients. This bankruptcy filing is the latest in a series of failures in the cryptocurrency industry and job cuts caused by last year’s drop in prices. Additionally, Genesis was already involved in a legal dispute with Gemini Trust Co, which is owned by the Winklevoss twins, over a crypto lending product called Earn that the two companies had jointly offered.

The Winklevoss twins have claimed that Genesis owes more than $900 million to 340,000 investors in a product called Earn. On January 10, Cameron Winklevoss called for the removal of Barry Silbert as the CEO of Digital Currency Group. After the bankruptcy filing, Cameron Winklevoss also tweeted that Silbert and Digital Currency Group were not offering a fair deal to creditors. He stated that unless they make a fair offer, they will be filing a lawsuit against Silbert and Digital Currency Group soon.

The Fall of Genesis: Crypto Lending Unit Seeks Bankruptcy Protection

The U.S. Securities and Exchange Commission (SEC) has charged Genesis and Gemini with illegally selling securities to investors through a program called Earn on January 12. Tyler Winklevoss has called the complaint disappointing.

Genesis is a company that helps financial institutions, such as hedge funds and asset managers, trade digital assets. They had almost $3 billion in total active loans at the end of the third quarter of the year, which is less than the $11.1 billion they had at the same time the previous year, according to their website. They also extended $130.6 billion in crypto loans and traded $116.5 billion in assets last year, as per their website.

Genesis had two major borrowers, which were Three Arrows Capital, a crypto hedge fund based in Singapore, and Alameda Research, a trading company associated with FTX. Both of these companies are currently going through bankruptcy proceedings. Three Arrows Capital’s debt to Genesis was taken over by its parent company, Digital Currency Group (DCG), who later filed a claim against Three Arrows. Some of the other companies that are under DCG’s portfolio include Grayscale, a crypto asset manager, and CoinDesk, a news service. Crypto lenders, which acted as banks, became popular during the pandemic, but unlike traditional banks, they are not required to have a capital cushion. This caused some lenders and their customers to face large losses when there was a shortage of collateral earlier this year.

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