Genesis Global Capital is preparing to finally file for bankruptcy after FTX’s collapse blew a hole through the company’s financials, according to people familiar with the matter.
The bankruptcy may be filed as soon as this week.
- Per a report from Bloomberg on Wednesday, talks over the bankruptcy are still ongoing, and plans could change.
- Shortly after FTX’s collapse, Genesis indicated that it may need to file for bankruptcy if it didn’t receive fresh funding. Its derivatives business lost $175 million within the defunct exchange, after which the company froze withdrawals.
- Ever since, Genesis has been unable to find a solution that would allow it to resume withdrawals. This has left users of the Winklevoss-owned Gemini Earn without access to their assets, since the service rehypothecated user funds to Genesis.
- Cameron Winklevoss has since accused Genesis, Digital Currency Group (DCG; parent to Genesis), and DCG CEO Barry Silbert of misrepresenting their financial health to Gemini through misleading financial statements. He called for the immediate removal of Barry Silbert as CEO as a consequence.
- Earlier this week, DCG announced that it would stop issuing quarterly dividend payments to to creditors in an effort to conserve cash.
- The firm is now exploring a full or partial sale of CoinDesk – its crypto media company – with advisors from Lazard Group, according to the Wall Street Journal.