Crypto lender Genesis seeks bankruptcy protection in last-ditch attempt to stay afloat
By Roy Green // Jan 24, 2023

Cryptocurrency lender Genesis Global Capital is debt-ridden and scrounging for funds to avert total collapse.

Saddled with liabilities that could go as high as $10 billion, it filed for Chapter 11 bankruptcy protection in Manhattan, New York on Jan. 19. The beleaguered crypto firm joined the growing list of digital currency businesses going under as a fallout of last year's plunge in crypto prices.

"An in-court restructuring presents the most effective avenue through which to preserve assets and create the best possible outcome for all Genesis stakeholders," Genesis' interim CEO Derar Islim said in a statement.

It was a long time coming for Genesis, which incurred major losses since last June following the bankruptcy of crypto exchange FTX and its sister firm Alameda Research. (Related: FTX collapse fallout: Crypto brokerage firm Genesis warns of possible bankruptcy.)

Genesis, a wholly-owned subsidiary of Barry Silbert's Digital Currency Group (DCG), announced a withdrawal and loan freeze on Nov. 16 last year. It disclosed that it had been holding ongoing discussions with advisers to its more than 100,000 creditors to evaluate the best way to preserve assets and continue with the business.

However, nothing concrete has developed and no substantial funds have been raised. This eventually led to the bankruptcy filing that came a week after the Securities and Exchange Commission charged Genesis and crypto exchange Gemini with violating securities law.

According to a report, Gemini and Genesis had partnered on the Gemini Earn program before the endeavor was terminated on Jan. 11. Gemini accused the beleagured crypto lender of withholding more than $900 million in customer funds.

In August 2022, Genesis laid off 20 percent of its workforce after hedge fund Three Arrows Capital defaulted on its $1.2 billion loan and later filed for bankruptcy. Genesis CEO Michael Moro also stepped down at the time, with Islim taking over his position.

Unable to stop the bleeding, Genesis again slashed 30 percent of its employees at the beginning of the year – to no avail.

Genesis claims it has over $150 million cash on hand

At the time of the filing, Genesis claims it still has more than $150 million cash on hand, which would be enough to fund operations during the restructuring process.

Industry estimates, however, put more credence on its major creditors, which listed $3.4 billion as loans payable. These include VanEck's New Finance Income Fund ($53 million), DCG ($37.9 million), Caramila Capital Management ($21.5 million), Los Angeles-based Big Time Studios ($20 million), crypto trading outfit Cumberland ($18.7 million) and Stellar Network's Development Foundation ($13 million).

Apart from its dire financial status, Genesis is also reeling from internal wrangling between its president, Cameron Winklevoss, and the head of its parent company DCG, Silbert.

In two open letters, Winklevoss claimed Silbert had engaged in "bad faith stall tactics." Winklevoss, who cofounded Genesis with twin brother Tyler, said Silbert and other DCG top brass misled Gemini in disclosing details of Genesis' financial health. Winklevoss also called for Silbert to step down as DCG CEO.

Silbert, in return, issued a letter to DCG shareholders, which said in part: "It has been challenging to have my integrity and good intentions questioned after spending a decade pouring everything into this company."

Before Genesis filed for bankruptcy, three former officials of the company asserted they had secured millions of dollars for a new crypto hedge fund, according to correspondence viewed by CNBC.

Matt Ballensweig, who was managing director and co-head of trading and lending when he left Genesis in September 2022, sent a message to a prospective investor in mid-December, regarding a fund he was starting called Hunting Hill Digital. Ballensweig said he had already secured $2.5 million from Bessemer Venture Partners at a $30 million post-money valuation and claimed that he and his partners were in the process of raising another $5 million.

These partners include Martin Garcia and Reed Werbitt, Genesis' former head of trading. Werbitt and  Garcia left Genesis around the same time as Ballensweig in 2022. Joining them is Adam Guren from hedge fund Hunting Hill. has more stories about crypto companies collapsing.

Watch Martin Brodel discuss the bankruptcy filing of crypto exchange FTX, which did business with Genesis.

This video is from the Martin Brodel channel on

More related stories:

Cryptocurrency collapse continues: Prominent crypto hedge fund defaults on $670 million loan.

Crypto lender BlockFi pauses customer withdrawals as it considers bankruptcy and layoffs following FTX implosion

Major crypto hedge fund Three Arrows Capital files for bankruptcy and fires 25% of workforce as crypto implosion spreads.

Sources include: 1 2

Take Action:
Support NewsTarget by linking to this article from your website.
Permalink to this article:
Embed article link:
Reprinting this article:
Non-commercial use is permitted with credit to (including a clickable link).
Please contact us for more information.
Free Email Alerts
Get independent news alerts on natural cures, food lab tests, cannabis medicine, science, robotics, drones, privacy and more. © 2022 All Rights Reserved. All content posted on this site is commentary or opinion and is protected under Free Speech. is not responsible for content written by contributing authors. The information on this site is provided for educational and entertainment purposes only. It is not intended as a substitute for professional advice of any kind. assumes no responsibility for the use or misuse of this material. Your use of this website indicates your agreement to these terms and those published on this site. All trademarks, registered trademarks and servicemarks mentioned on this site are the property of their respective owners.

This site uses cookies
News Target uses cookies to improve your experience on our site. By using this site, you agree to our privacy policy.
Learn More
Get 100% real, uncensored news delivered straight to your inbox
You can unsubscribe at any time. Your email privacy is completely protected.