Genesis Crypto Firm Struggles To Stay Afloat Amid Market Volatility

Bulletpoints:
– Crypto lending firm Genesis held $5.1 billion in liabilities in the weeks following its freeze on withdrawals in November.
– The U.S. Bankruptcy Court for the Southern District of New York provided a breakdown of Genesis’ financial state heading into its restructuring.
– Genesis became the latest crypto firm caught up in the immediate fallout of FTX’s implosion, with three of its entities filing for Chapter 11 bankruptcy protection.

Crypto markets were abuzz today as Bitcoin rose 6% to trade at $22,300, while Ether was also trading up 5% to $1,640. Equities closed up, indicating a continued bullish trend in the market. However, one crypto firm has been feeling the heat of the market’s volatility.

Genesis, a crypto lending firm, has been struggling recently, with $5.1 billion in liabilities in the weeks following its freeze on withdrawals in November. In a first-day motion in the U.S. Bankruptcy Court for the Southern District of New York, interim CEO Derar Islim provided a breakdown of Genesis’ financial state heading into its restructuring.

The company has become the latest crypto firm caught up in the immediate fallout of FTX’s implosion, with three of its entities – Genesis HoldCo, Genesis Global Capital LLC and Genesis Asia Pacific PTE. LTD – filing for Chapter 11 bankruptcy protection late Thursday. Islim said that the collapse of FTX and sister company Alameda sparked a “run on the bank”, with customers demanding Genesis repay $827 million in loans, forcing its lending units to freeze withdrawals.

The filing outlines $2.9 billion of Genesis’ liabilities, including $1.6 billion in receivables, $820 million in liabilities to customers, $190 million in liabilities to creditors and $100 million in liabilities to shareholders. Islim also noted that Genesis’ total liabilities may be higher than the amount detailed in the filing.

The filing is the latest in a string of bankruptcies in the crypto space. It remains to be seen how the firm will fare in the coming months, but it is clear that the company is struggling to stay afloat. As the crypto markets continue to be volatile, it is important for companies to take steps to mitigate the risk associated with the industry.

Stellar Development Foundation Owed $13M in Genesis Bankruptcy

• The Stellar Development Foundation was revealed to be among the bankrupt crypto lending desk’s largest creditors with a claim for $13 million.
• The foundation has confirmed it loaned around $13 million to Genesis in 2022, but described the sum as “immaterial” in relation to the rest of its treasury.
• The Stellar Development Foundation currently holds 30 billion XLM to be used for promoting and enhancing Stellar, with the paper value of its treasury estimated to be above $200 million.

The Stellar Development Foundation, a nonprofit organization set up to promote growth on the Stellar blockchain, has been revealed to be among the largest creditors of the bankrupt crypto lending giant Genesis. According to bankruptcy filings, the foundation has a claim for $13 million against Genesis.

The foundation has confirmed the loan, saying that the loaned amount of $13 million to the lending desk in 2022 is immaterial when compared to the rest of its treasury. The Stellar Development Foundation currently holds around 30 billion XLM tokens, which gives it a paper value of over $200 million.

The entanglement between the Stellar Development Foundation and Genesis is the latest fallout from the crypto lending desk’s bankruptcy filing. Genesis had been operating since 2018, offering crypto-backed loans to customers in a variety of currencies.

However, due to a variety of factors, including the COVID-19 pandemic, Genesis was unable to keep up with its loan obligations and had to file for bankruptcy in January 2021.

In addition to the loan to the Stellar Development Foundation, Genesis has also received numerous other creditors who are seeking repayment. Among the larger creditors are Block.one, the company behind the EOS blockchain, and overseas exchanges FTX and OKEx.

In response to the bankruptcy filing, the Stellar Development Foundation has stated that it is working with Genesis and its creditors to ensure that the process is handled as fairly and efficiently as possible.

The Stellar Development Foundation is committed to ensuring that its loan to Genesis is repaid in full, and that its own interests are taken into account. The foundation is also continuing to actively support the Stellar blockchain, and its mission to promote growth on the platform.

Ultimately, the Stellar Development Foundation’s involvement in the Genesis bankruptcy serves as a reminder of the risks associated with crypto investments. While the foundation expects to be repaid in full, it is important to note that these types of investments can be highly volatile and unpredictable. Any investor considering such investments should be aware of the potential risks.