Sources close to the company said a bankruptcy filing could be expected this week due to a liquidity crisis.
Crypto lending company Genesis Global Capital plans to declare bankruptcy soon. This is reported by Bloomberg, citing sources inside the company.
Previously, representatives of Genesis already reported on the possible bankruptcy filing in case the liquidity crisis wouldn’t allow the company to continue servicing its financial obligations. FTX, a crypto exchange, declared bankruptcy in a similar situation.
The report came as the Securities and Exchange Commission (SEC) filed a case against Genesis and Gemini, accusing them of offering unregistered securities through Gemini’s Earn program. Earlier, Cameron Winklevoss, Co-Founder of Gemini, published an open letter to Barry Silbert, CEO of Digital Currency Group (DCG), a parent company of Genesis Global Capital. In his letter, Winklevoss accused DCG representatives of owing $900 million to Gemini and $1.675 billion to Genesis. DCG denied all of the allegations.
Moreover, venture capital firm Three Arrows Capital, which declared bankruptcy in 2022, also owed Genesis $447.5 million and 4,550 BTC. The crypto lender held about $175 million more in FTX accounts. Genesis suspended withdrawals following its bankruptcy filing. Rumors about Digital Currency Group’s financial problems began to swirl wildly amid this backdrop.
