After months of struggle, crypto lending and trading firm Produce has filed for bankruptcy – but that’s not the end of his troubles.
origin, a unit of digital currency group (DCG) said in a press release Genesis Global Holdco, LLC and its two lending business subsidiaries, Genesis Global Capital, LLC And Origin Asia Pacific Pte. Ltd., The United States filed a voluntary Chapter 11 filing on Thursday in the Southern District of New York.
Other subsidiaries of Origin and other entities that are involved in derivatives and spot trading as well as custody businesses are not part of the bankruptcy filing. Their operation will continue.
The announcement states that,
“Origin has proposed a roadmap for an exit including a Chapter 11 Plan (the “Plan”) that calls for a framework for the global resolution of all claims, and the creation of a trust that will distribute assets to creditors. The plan contemplates a dual-track process in pursuit of a sale, capital raising and/or equity transaction that would enable the business to emerge under new ownership.”
It will begin the marketing and sales process to monetize Genesis Global Holdco, it said, and it will begin repaying creditors. If no sale or capital is raised, the creditors will receive ownership interests in the restructured Genesis Global Holdco.
To Bloomberg,
“Genesis Global Capital listed both assets and liabilities as well as more than 100,000 creditors in the same range, $1 billion to $10 billion – with the top 50 unsecured claims amounting to approximately $3.4 billion.”
The company also plans to use the $150 million in cash to fund the company in bankruptcy. It is still allowed by Chapter 11 to continue operating as it tries to repay creditors.
Genesis has been reporting for several days about potentially getting ready to declare bankruptcy. Following the credit crunch that hit the crypto industry, it was feeling the immense pressure of bankruptcy for weeks. on January 18, as ReportedIt was suggested by people familiar with discussions between Genesis and its creditors that a bankruptcy announcement could be made as soon as this week — and they were correct.
just a few days before that, it was revealed that Genesis owes creditors more than $3 billion – including $900 million Gemini Over $301 million for customers and users of the Dutch crypto exchange bitwavo – to pressure crypto conglomerate DCG to consider selling assets in its large venture portfolio to raise funds.
as a reminder, in view of ftxthe fall of, Genesis announced that it was suspend redemption and new loan originations in mid-November last year, saying “unusual withdrawal requests” exceed its “current liquidity”.
then it turned out that Genesis had asked for emergency loan of $1bn before closing redemptions for customers.
Redemptions and loan originations in Genesis’ lending operations are still suspended and claims will be handled in bankruptcy court, according to Bloomberg.
Origin said in the announcement that the restructuring process would be led by an “independent special committee”.
Is a lawsuit imminent?
Origin is already in the middle of a dispute with major crypto exchange Gemini, which was founded by Cameron and Tyler Winklevoss.
The Winklevoss twins have said that Genesis owes more than $900 million to some 340,000 Earn Program investors, Call To remove Barry Silbert as chief executive of Digital Currency Group.
According to Genesis’ bankruptcy filing,
“Origin has now initiated a court-supervised restructuring process to take these discussions forward and reach a holistic resolution for its lending business, which, if achieved, will provide an optimal solution for Origin customers and Gemini Earn users.” will deliver results.”
Cameron Winklevoss, shortly after filing bankruptcy Tweeted Silbert and DCG refused to offer a fair deal to creditors, saying:
“Until Barry [Silbert] And DCG comes to its senses and makes a reasonable offer to the creditors, we will soon file a lawsuit against Barry and DCG.”
He said the bankruptcy court provides “a much-needed forum” for Genesis, DCG and Silbert to provide clarification to creditors.
A crumbling empire?
Origin is owned by Digital Currency Group, a venture capital firm focused on the digital currency market. It lists over 160 companies in its portfolio on its website, of which it has acquired 28. coindesk, scaleAnd Genesis is the biggest of them all.
DCG had said in a letter to shareholders just three days ago that it was Suspending Quarterly Dividend To preserve cash, as the group focuses on “strengthening our balance sheet by reducing operating expenses and preserving liquidity”.
Earlier this month, the U.S. Securities and Exchange Commission ,seconds, fee brought Against Gemini Exchange and Genesis “for unregistered offering and sale of securities to retail investors through the Gemini Earn Crypto Asset Lending Program.” The regulator alleged that through this unregistered offering, the two companies raised crypto assets worth “billions of dollars” from “hundreds of thousands of investors”.
Genesis and Gemini launched the Gemini Earn program for retail investors in February 2021, where Gemini deducts agent fees from returns paid to Gemini Earn investors. In response, exchange co-founder Tyler Winklevoss Called The SEC’s actions were “adversarial” and claimed that Gemini had been in discussions with the SEC about the earn program for months.
Then, on January 19, it was Reported That crypto news website CoinDesk tapped advisors Lazard, a financial advisory and asset management firm, is looking to sell a portion or all of its business. “My goal in hiring Lazard is to explore various options for attracting growth capital to the CoinDesk business, which could include a partial or complete sale,” said Kevin Worth, CoinDesk CEO.
This came as another sign that entrepreneur Barry Silbert’s crypto empire could be in serious trouble.
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learn more:
, Justin Sun says he’s interested in investing up to $1 billion for DCG asset fire sale
, Crypto Firm Genesis Struggles To Raise Fresh Capital, In Talks With Binance – Next Domino To Fall From FTX Contagion?
, DCG in talks with creditors – Will Gemini crypto depositors get their money back?
, Crypto Boss Mike Novogratz Says It’s Time To Cut Costs And Survive This ‘Transition Period’
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