Digital currency brokerage Genesis announced that it filed for Chapter 11 bankruptcy late Thursday.
“An in-court restructuring presents the most effective avenue through which to preserve assets and create the best possible outcome for all Genesis stakeholders,” said Genesis’ interim CEO Derar Islim in a prepared statement.
The company says that it has more than $150 million in cash on hand, which it describes as “ample liquidity” to fund operations during the restructuring process.
The entities that filed the Chapter 11 petitions in the Southern District of New York are Genesis Global—a holding company—and lending-focused subsidiaries Genesis Global Capital and Genesis Asia Pacific. A spokesperson for Genesis clarified that Genesis Global Trading and other subsidiaries involved in the derivatives and spot trading and custody businesses are not included, and are continuing to operate.
The filings come after widespread reports of Genesis’ impending bankruptcy, and a week after the SEC charged the firm and crypto exchange Gemini with violating securities law.
The filings included a list of the companies’ top creditors. While many are unnamed, they include Mirana Corp. of Singapore, Moonalpha Financial Services in Hong Kong, Coincident Capital in the Cayman Islands, Donut, Inc., Switzerland based Altcoinomy, and Streami Inc. of Korea.
Genesis launched the first over-the-counter Bitcoin trading desk in 2013, going on to become one of the industry’s largest players.
The official announcement confirms that Genesis was adversely impacted by two of the largest collapses in the crypto industry last year.
“We have made significant progress refining our business plans to remedy liquidity issues caused by the recent extraordinary challenges in our industry—including the default of Three Arrows Capital and the bankruptcy of FTX,” Islim said. “We seek to implement a path to maximize value and provide the best opportunity for our business to emerge well-positioned for the future.”
“We have crafted a deliberate process and roadmap through which we believe we can reach the best solution for clients and other stakeholders,” Paul Aronzon, an independent director at Genesis, added in the announcement.
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Source: https://decrypt.co/119639/genesis-bankruptcy-chapter-11
