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.