Genesis, a cryptocurrency lending company, has failed to refund payments totaling $900 million. Genesis has said that there is not going to be a bankruptcy, despite the fact that there have been reports of a liquidity difficulty; yet, the worry does not seem to be easing.
It was reported in the Financial Times on March 3 (local time) that Genesis and its parent firm, Digital Currency Group (DCG), which was facing a liquidity issue as a result of the FTX crisis, owed $900 million to Geminion’s clients. This information came from the Financial Times. Creditors of Gemini are now in discussions with DCG over the recovery of monies from Genesis.
The most important loan partner for Gemini is Genesis. When a consumer deposited bitcoin with Gemini, the company offered a high-yield service that paid interest ranging from 0.45% to 8%, depending on the kind of cryptocurrency the user placed. This service was comparable to bank deposits.
Genesis sustained a loss of $1.1 billion as a result of a loan it made to the failed hedge fund Three Arrow Capital (3AC) in the summer of 2016. During this round of the process, Genesis’ parent company, DCG, took over some of Genesis’ debt. Because Genesis was facing a liquidity difficulty as a result of FTX’s bankruptcy, the company temporarily halted client withdrawals, new loan applications, and repayments.
There were rumors that Genesis was facing a problem when another cryptocurrency loan firm, BlockFi, declared bankruptcy. Genesis responded to these rumors by declaring, “We will not go bankrupt,” and stating that it intends to handle the present issue without filing for bankruptcy.
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