Following the collapse of FTX, cryptocurrency lender Genesis Global has become the latest firm to file for Chapter 11 bankruptcy protection in New York.
Genesis, a cryptocurrency lender, has declared Chapter 11 bankruptcy in the Southern District of New York.
According to the Jan. 19 filing, the company has estimated liabilities of $1 billion to $10 billion and assets in the same range.
According to previous reports, the company was considering filing for bankruptcy if it was unable to secure funds to address its liquidity crisis.
Genesis stated in a news release dated January 19 that it has been in conversations with its advisors “to its creditors and corporate parent Digital Currency Group (DCG) to identify the most viable approach to preserve assets and take the business forward.”
“Genesis has now commenced a court-supervised restructuring process to further advance these discussions.”
According to the company’s Chapter 11 plan, it is considering a “dual track approach” involving a “sale, capital raise, and/or an equitization transaction” that would allow the company to “emerge under new ownership.”
Genesis’ derivatives, spot trading, broker-dealer, and custody businesses are not included in the Chapter 11 proceedings and will continue to operate, according to the company.
It also stated that it had over $150 million in cash on hand, which it believes “will provide adequate liquidity to fund its continued business activities and simplify the restructuring process.”
The restructuring would be overseen by a “independent special committee” of the company’s board of directors, with the goal of producing “an optimal conclusion for Genesis clients and Gemini Earn users.”
Withdrawals from the platform were suspended in November due to market turmoil triggered by the collapse of FTX. Earlier this month, the company fired off another 30% of its workers, marking the second round of layoffs in six months.
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