Crypto lending unit of Genesis files for U.S. bankruptcy

(Reuters) -The lending unit of crypto firm Genesis filed for U.S. bankruptcy protection on Thursday, owing creditors at least $3.4 billion, after being toppled by a market rout

along with the likes of exchange FTX and lender BlockFi. Genesis Global Capital, one of the largest crypto lenders, froze customer redemptions on Nov. 16 after the collapse

of major exchange FTX sent shockwaves through the crypto asset industry, fuelling concern that other companies could implode. Genesis is owned by venture capital firm

Digital Currency Group (DCG). Its bankruptcy filing is the latest in a string of crypto failures triggered by a market collapse that wiped about $1.3 trillion off the value

of crypto tokens last year. While bitcoin has rallied so far in 2023, the impact of the market collapse has continued to hit companies in the highly interconnected

sector. The bankruptcy "doesn’t come as a shock to the markets," said Ivan Kachkovski, currency and crypto strategist at UBS. "It remains to be seen if the chain effect

would go on." "However, given that the funds have already been frozen for over two months and no other large crypto company reported an associated weakness, it’s likely that

the contagion would be limited." Genesis' lending unit said it had both assets and liabilities in the range of $1 billion to $10 billion, and estimated it had more than

100,000 creditors in its filing with the U.S. Bankruptcy Court for the Southern District of New York. Genesis Global Holdco, the parent group of Genesis Global Capital, also

filed for bankruptcy protection, along with another lending unit Genesis Asia Pacific.