Genesis crypto broker plans to file for bankruptcy by the end of this week.
According to insiders, after several months of disputes, the company has begun to conclude a deal with creditors. If the crypto broker files for bankruptcy, Genesis will be the latest victim of Sam Bankman-Fried’s FTX exchange theft.
Genesis and its owner, the crypto conglomerate Digital Currency Group, have been negotiating with creditors since mid-November. The crypto broker owes more than $3 billion, including $900 million to Gemini clients, Cameron and Tyler Winklevoss crypto exchanges, and €280 million to the Dutch Bitvavo exchange.
According to insiders, negotiations are currently underway with creditors on a possible bankruptcy deal for Genesis. This transaction will include cash and equity of DCG. The bankruptcy notice may be announced before the end of this week.
Genesis ran into problems shortly after the FTX crash. The company, which was one of the largest creditors in the crypto market, suspended the withdrawal of funds by customers. Unprecedented market turmoil and liquidity problems were cited as the reason for this decision. The company tried to find ways to improve its situation, but it failed.
The negotiations with creditors became known after Cameron Winklevoss called on the board of DCG to dismiss its chief executive Barry Silbert due to unfair tactics in discussing the upcoming bankruptcy.
Gemini used Genesis as its main lending partner under the crypto “earn” program. This program guaranteed retail investors high returns in exchange for the issuance of the moment.
Genesis’ bankruptcy could be a significant blow to Silbert’s crypto group, which includes trading publication CoinDesk and asset manager Grayscale.
The collapse of Genesis will also help pay off a $350 million debt that is on a loan provided by the investment group of Chelsea FC owner Todd Payne.