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NEW YORK, Jan. 20 (AP) — Crypto lending firm Genesis is seeking Chapter 11 bankruptcy protection as falling prices and the collapse of FTX continue to roil the industry.
Genesis Global Holdco LLC and its two lending subsidiaries, Genesis Global Capital LLC and Genesis Asia Pacific Pte. Ltd., filed for bankruptcy protection in the Southern District of New York.
Genesis stated that its other subsidiaries involved in derivatives and spot trading and custody business and Genesis Global Trading are not within the scope of the filing and continue to carry out customer trading business.
Genesis said it has more than $150 million in cash on hand, providing ample liquidity to support its ongoing business operations and facilitate its restructuring.
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Last week, the SEC investigated Genesis Global Capital and cryptocurrency exchange Gemini for allegedly selling unregistered securities through a popular program that was supposed to pay exorbitant interest on cryptocurrency deposits.
The SEC’s lawsuit is part of a broader crackdown on cryptocurrencies by multiple U.S. government agencies after their prices slumped last year, with mostly retail investors suffering billions of dollars in losses.
Genesis’ restructuring plan includes the creation of a trust that will distribute assets to creditors.
The plan contemplates a dual-track process and is considering a possible sale, financing or other transaction to bring the business under new ownership.
The New York-based company will initiate a marketing and sales process to monetize or otherwise raise funds from Genesis Global Holdco’s assets, using the proceeds of the transaction to pay creditors. If the process does not result in a sale or financing, creditors will receive an ownership interest in the restructured Genesis Global Holdco.
“”While we have made significant progress in refining our business plan to address the liquidity issues created by our industry’s recent idiosyncratic challenges, including the default of Three Arrows Capital and the bankruptcy of FTX, an in-court restructuring provides the most efficient path8 “This is about protecting assets and creating the best possible outcome for all Genesis stakeholders,” interim CEO Derar Islim, who took over in May, said in a statement. (Associated Press)
(This is an unedited and auto-generated story from a Syndicated News feed, the content body may not have been modified or edited by LatestLY staff)
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