- Genesis Global Capital is reportedly preparing to file for bankruptcy.
- The DCG subsidiary has been in negotiations with several creditor groups.
- Genesis has been struggling to raise funds for its lending unit following a liquidity crunch.
- Parent firm Digital Currency Group suspended dividends today due to liquidity issues with subsidiaries.
Genesis Global Capital, one of the most popular subsidiaries of the Digital Currency Group (DCG), is reportedly preparing to file for bankruptcy as soon as this week. This crypto lending subsidiary of the Digital Currency Group has been attempting to raise funds to maintain liquidity ever since FTX’s collapse caused it to halt withdrawals in November 2022.
Genesis in confidential negotiations with creditors
According to a report by Bloomberg, Genesis Global Capital has engaged multiple creditor groups in negotiations amid liquidity issues that have spilled over to parent firm Digital Currency Group. The crypto broker had indicated in November 2022 that a bankruptcy filing may be imminent unless fresh capital was raised to sustain operations.
People close to the matter have stated that a bankruptcy filing may not be necessary and that plans could change. As per a report by The Block, creditors of Genesis are actively involved in negotiating the terms of a possible chapter 11 bankruptcy filing. Sources revealed that creditors may agree to a forbearance period between 1-2 years under a prepackaged bankruptcy plan in exchange for cash payments and equity in the Digital Currency Group.
DCG’s founder and CEO Barry Silbert has been involved in a public feud with Gemini’s co-founder and President Cameron Winklevoss. The latter’s customers are allegedly owed more than $900 million as part of Gemini’s Earn Program. The non-payment has dragged Silbert into the limelight following a series of open letters published by Cameron Winklevoss.
People familiar with the matter have stated that the communication regarding the bankruptcy filing is ongoing and may change. Genesis’ parent firm Digital Currency Group revealed earlier today that it would be suspending its quarterly dividends to preserve cash following liquidity issues with its subsidiaries.
Source: Read Full Article