Cryptocurrency lender Genesis Global Capital is said to be preparing to file for Chapter 11 bankruptcy protection as soon as this week.
according to Report By Bloomberg, a subsidiary of Digital Currency Group (DCG) is trying to raise money to help cover its debt. If you fail to do so, you will file for bankruptcy.
origin It is said debtor more than $3 billion to its creditors. DCG, the parent company of Genesis, is considering selling part of its venture capital portfolio to save its wholly owned subsidiary. The portfolio is worth more than $500 million and consists of more than 200 cryptocurrency-related companies.
Genesis problems with Gemini and regulators
One of the creditors Genesis owes money to is Gemini, a cryptocurrency exchange with more than $900 million in customer funds stuck with the defaulted lender. Gemini halted withdrawals in late November following Genesis’ decision to stop loan refunds.
Gemini recently started a public feud with Genesis, DCG, and its founder and CEO, Barry Silbert. Gemini co-founder Cameron Winklevoss accused Silbert of accounting fraud and demanded his removal from the company.
Unable to resolve the liquidity issues related to Genesis, Gemini has since terminated the loan partnership with the lender and officially terminated the Earn Program.
However, that didn’t stop the organizers from taking a closer look at both Gemini and Genesis. The US Stock Exchange (SEC) ended up Shipping The two companies sell unregistered securities to hundreds of thousands of investors around the world.
The SEC even noted that Genesis lent Gemini customer money to DCG, which used the money to fund investment opportunities and buy back DCG stock from non-employee shareholders in secondary transactions.
Genesis is probably the last cryptocurrency lender on the market. Investors should follow the development of this story to better prepare for a possible sale of digital assets if Genesis does indeed file for bankruptcy.