Final applause for Genesis? The company could file for bankruptcy this week

The end of a slow sinking? Loan firm Genesis, struggling from the FTX affair, is finally filing for bankruptcy. The situation arose after numerous skirmishes between the CEO of the company and the Winklevoss brothers, who manage the Gemini platform.

Genesis Descent into Hell

It cannot be said that this is entirely a surprise for the ecosystem. Signs of the company’s troubles have been piling up since last November when we learned that Genesis was going through a liquidity crisis. The trigger was, among other things, the $175 million locked up on FTX, the bankrupt platform that collapsed the same month.

We have since learned that Genesis owes $900 million to the Gemini trading platform, created by the Winklevoss brothers. The two companies I am a partner of the “Gemini Earn” program., which allowed users to earn up to 8% interest by locking up their cryptocurrencies. It was suspended last November.

From where a particularly public conflict between Barry Silbert, CEO of the Digital Currency Group (DCG), and Cameron Winklevoss, CEO of Gemini. DCG owns the heavyweights in the ecosystem, including Grayscale and CoinDesk media. On Twitter, these two central figures made no secret of their battles, reproaching each other for not being able to repay him:

One of the latest signs of impending bankruptcy was the layoff of 30% of Genesis staff on January 6th. A decision following a previous layoff 20% of its workforce last summer.

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Genesis soon bankrupt?

According to our Bloomberg colleagues, sources close to the case say that Genesis could file for bankruptcy this week. The discrete negotiations to find a financial solution would not have been successful and the company would currently have its back against the wall. Digital Currency Group reportedly announced two days ago that quarterly dividend payments to shareholders have been suspended, in order to conserve cash.

The solution of the sale (partial or total) of the company was also proposed, and the Lazard company arrived as reinforcements to offer advice to Genesis. However, the sinking seems almost inevitable, especially since Gary Gensler and the SEC have confirmed that the American gendarme is indicting the two entities for failure to comply with federal securities laws. It is therefore another collateral victim of the FTX affair that could fall this week.

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Source: Bloomberg

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