Crypto Lender Genesis Files for Bankruptcy as Crisis Spreads

(Bloomberg) -- Cryptocurrency lender Genesis Global Holdco filed for bankruptcy, the latest firm to collapse in the aftermath of FTX’s swift downfall.  Most Read from

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on Thursday in the Southern District of New York, court documents show. It said in a statement that it plans to use the court process to try to sell assets or raise money. If that

process is unsuccessful, creditors will own the reorganized business.  The company said it would use its $150 million of cash on hand to fund itself in bankruptcy. Chapter

11 filings allow a firm to continue operating while working out a plan to repay creditors.  Parent company Digital Currency Group had been in confidential negotiations with

various creditor groups amid a liquidity crunch, and Genesis had warned that it may need to file for bankruptcy if it fails to raise cash, Bloomberg News previously

reported. Genesis Global Trading and other units involved in trading and custody aren’t part of the bankruptcy filing.  Financial pressure at Barry Silbert’s DCG began

to emerge following the collapse of hedge fund Three Arrows Capital. Genesis suspended withdrawals in November, soon after crypto exchange FTX — where Genesis held some of its

funds — filed for bankruptcy.