Genesis, part of the Digital Currency Group (DCG) and previously a big crypto lender, is considering filing for Chapter 11 bankruptcy, according to a report.
The institutional-focused digital asset platform revealed issues in November when it temporarily suspended redemptions. Genesis, like some other crypto firms, had been impacted by the crypto contagion challenging the entire industry. The move now appears to be more permanent. Chatter soon emerged about a possible bankruptcy filing, but Genesis swatted down those rumors. Things heated up when Genesis’s decisions impacted crypto trading platform Gemini which had been using Genisis’s service for its yield program.
In recent days, Gemini posted an open letter criticizing Barry Silbert and his company DCG for his inability to resolve the issue. The letter claimed that DCG owes Genesis approximately $1.675 billion.
An update by Genesis posted yesterday explained:
“While we are committed to moving as quickly as possible, this is a very complex process that will take some additional time. We believe we can arrive at a solution. We will continue to give you updates on meaningful developments, including any updates on timing. As a key element in this process, we have made significant progress in refining our business plans for Genesis’ client offerings. This includes reducing costs and driving efficiencies in all our business lines. We believe our continued focus on further sharpening our business will move us in the right direction as we begin the new year, as well as providing more options for working out the lending business.”
A report by WSJ.com/Barrons, claims that Genesis has now laid off a third of its employees and is considering filing for bankruptcy. Citing “people familiar with the matter, the report indicated that employee reduction was across the firm and Genesis is working with Moelis & Co. with Chapter 11 being an option. A Genesis spokesperson stated they were working to “preserve client assets” and looking to move the business forward.