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Genesis\u2019s two lending subsidiaries, Genesis Global Capital and Genesis Asia Pacific, have filed for Chapter 11 bankruptcy. <\/p>\n
According to the announcement<\/a>, the firm aims to enact \u201ca global resolution to maximize value for all clients and stakeholders and strengthen its business for the future.\u201d<\/p>\n In November 2022, Genesis Global Capital halted their operations, freezing withdrawals amidst a liquidity crisis that came as a result of the implosion of the FTX<\/a> cryptocurrency exchange. The lending arm was FTX\u2019s largest unsecured lender, with claims amounting to more than $226 million. <\/p>\n Bitcoin Magazine PRO described how the firm<\/a> needed a liquidity injection of at least $1 billion dollars in order to save itself \u2014 but this did not happen. In January 2023, Genesis\u2019 parent company, Digital Currency Group, was accused by Gemini President Cameron Winklevoss<\/a> of using Genesis in an elaborate high-yield scheme which transferred the high-risk of these yield generating investments to Gemini\u2019s Earn product users. Gemini Earn was earning this yield via Genesis, which, according to the statements made by Winklevoss, Gemini believed to be a reputable counterparty. <\/p>\n \u201cGenesis has proposed a roadmap to an exit including a Chapter 11 plan that calls for a framework for a global resolution of all claims through, and the creation of, a trust that will distribute assets to creditors,\u201d the filing describes. \u201cAll aspects of the restructuring process will be overseen by an independent special committee of the company\u2019s board of directors.\u201d<\/p>\n