The end of a slow sinking? The lending firm Genesis, in difficulty since the FTX affair, is finally about to declare bankruptcy. The situation arises after numerous skirmishes between the CEO of the company and the Winklevoss brothers, who manage the Gemini platform.
Genesis’ Descent into Hell
It cannot be said that this is entirely a surprise for the ecosystem. The firm’s signs of difficulty have accumulated since last November, when we learned that Genesis was experiencing a liquidity crisis. The trigger was, among other things, the $175 million blocked on FTX, the fallen platform that collapsed the same month.
We have since learned that Genesis owes $900 million to the Gemini exchange platform, created by the Winklevoss brothers. The two companies are partners in the “Gemini Earn” program, which allowed users to earn up to 8% interest by locking up their cryptocurrencies. He was suspended last November.
From where a particularly public conflict between Barry Silbert, CEO of the Digital Currency Group (DCG), and Cameron Winklevoss, CEO of Gemini. DCG owns heavyweights in the ecosystem, including Grayscale as well as the CoinDesk media. On Twitter, these two central figures did not hide their battles, one reproaching the other for not having been able to reimburse him:
DCG did not borrow $1.675 billion from Genesis
DCG has never missed an outstanding interest payment to Genesis and is current on all loans; next loan maturity is May 2023
DCG delivered to Genesis and your advisors a proposal on December 29th and has not received any response
— Barry Silbert (@BarrySilbert) January 2, 2023
One of the last signs of a coming bankruptcy was the layoff of 30% of Genesis staff on January 6th. A decision which followed a previous dismissal 20% of its workforce last summer.
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Genesis soon in bankruptcy?
According to our colleagues at Bloomberg, sources close to the case say that Genesis could file for bankruptcy this week. The discreet negotiations to find a financial solution would indeed not have succeeded, and the company would currently have its back against the wall. Digital Currency Group reportedly announced two days ago that the quarterly payment of shareholder dividends was suspended, in order to conserve liquidity.
The solution of the sale (partial or total) of the company is also envisaged, and the Lazard company has arrived as reinforcements to offer advice to Genesis. The sinking seems in any case almost inevitable, especially since Gary Gensler and the SEC have confirmed that the American gendarme is indicting the two entities for failure to comply with federal securities laws. It is therefore one more collateral victim of the FTX affair which could fall this week.
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Journalist at Cryptoast, I fell into the pot of cryptocurrencies a few years ago. I am passionate about the innovative technologies that stem from the blockchain and I like to find the most crispy information to share with you.
Marine Debelloir
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