Digital Currency Group (DCG), the parent firm of failed crypto broker Genesis Global Capital, plans to transfer equity in another unit, Genesis Global Trading, to Genesis Global Holdco and eventually sell both companies to raise capital to pay back creditors, according to court filings on Friday. Genesis Global Capital and Genesis Global Holdco both filed for Chapter 11 bankruptcy protection from creditors last month.
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- “Genesis today moved a step closer to a resolution for our lending business that maximizes value for all clients and stakeholders,” Derar Islim, Interim CEO of Genesis Global Trading, said in a statement. “We have filed with the court our previously announced agreement in principle with DCG and key groups of creditors.”
- Genesis Global Capital was a lending partner of New York-based crypto exchange Gemini for the exchange’s Gemini Earn program, which allowed investors to loan their crypto assets to Genesis for up to 8% interest.
- Genesis halted customer withdrawals on this program in Nov. 2022 following the collapse of Bahamas-based crypto exchange FTX in the same month.
- The crypto brokerage filed for Chapter 11 bankruptcy on Jan. 20, with its aggregated liabilities as of the date of filings of between US$1 billion and US$10 billion to over 100,000 creditors.
- Last week Gemini agreed to put up US$100 million towards Earn users’ asset recovery as part of an in-principal agreement with Genesis and DCG and others to place all entities under Genesis Global Holdco.
- Genesis had a US$175 million exposure to FTX on its trading account and was looking to raise US$1 billion from investors to cover a liquidity crunch before it paused withdrawals and new loans in mid-November.