The collapse of the crypto exchange FTX caused yet another crypto-related firm to file for bankruptcy.
Genesis, a cryptocurrency lending firm established in 2013, has filed for Chapter 11 bankruptcy in the United States Bankruptcy Court in the Southern District of New York.
According to the press release shared on January 19th, the bankruptcy filing applies to Genesis Global Holdco, LLC and its lending businesses Genesis Global Capital, LLC, and Genesis Asia Pacific Pte. Ltd.
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The company stated that its subsidiaries “involved in the derivatives and spot trading and custody businesses,” as well as Genesis Global Trading, are not included in the bankruptcy filing.
In the announcement, Genesis calls its bankruptcy filing a strategic action. Genesis believes that this will help the company to achieve a “global resolution to maximize value for all clients and stakeholders.” Moreover, Genesis claims that filing will help to strengthen its business.
Genesis has reportedly created a Chapter 11 plan that allows the company to resolve its issues. In the restructuring plan, the company is set to consider “a dual track process in pursuit of a sale, capital raise and/or equitization transaction that would enable the business to emerge under new ownership.”
When talking about Genesis plan, Genesis independent director Paul Aronzon stated:
We have crafted a deliberate process and roadmap through which we believe we can reach the best solution for clients and other stakeholders. We look forward to advancing our dialogue with DCG and our creditors’ advisors as we seek to implement a path to maximize value and provide the best opportunity for our business to emerge well-positioned for the future.
In the press release, Genesis claims it has “$150 million in cash on hand.” The company believes that $150 million will be more than enough to support its “ongoing business operations” and speed up its restructuring plan.
At the end of its announcement, Genesis noted that it has filed several “first-day motions” and is expecting to receive approvals for the requests “in the coming days.”
The news about Genesis possibly filing for Chapter 11 bankruptcy broke on January 18th, with multiple sources citing a person familiar with the matter.
