Genesis Global Holdco, the parent company of cryptocurrency lender Genesis Global Capital, filed for Chapter 11 bankruptcy protection on Jan. 20.
This comes after Genesis Global Capital suspended customer repayments on November 16, sparking concerns that other companies could collapse.
Genesis Global Capital listed more than 100,000 creditors in a “large” bankruptcy filing, with total debts ranging from $1.2 billion to $11 billion, according to bankruptcy records.
Although the possibility of bankruptcy had been speculated for months, the news still shocked many in the cryptocurrency industry.
Adding to the company’s woes, the U.S. Securities and Exchange Commission (SEC) just filed a lawsuit against Genesis and its former partner Gemini for allegedly selling securities illegally.
Digital Currency Group (DCG), which owns CoinDesk and is the parent company of Genesis Global Holdco and its subsidiaries GGC and Genesis Asia Pacific Pte. Ltd., responded to the bankruptcy filing by saying it would consider a sale or equity transaction to repay creditors. DCG also noted that it has $150 million in cash to support the restructuring.
Genesis Capital bankruptcy case nears resolution
Fast forward to today, and DCG has provided an update, saying that claims in the bankruptcy case of its lending arm Genesis Capital are close to being resolved, according to a recent report from The Block.
"After months of tireless negotiations led by DCG's leadership, we are close to reaching an agreement in principle to resolve the claims in Genesis Capital's Chapter 11 case," DCG said in a letter to shareholders. Just a month ago, Gemini, one of Genesis's creditors, sued the company for alleged fraud.
DCG’s optimism about resolving the bankruptcy case will be good news for the cryptocurrency industry, which has been closely watching the developments. As one of the largest cryptocurrency lenders, the failure of Genesis Global Capital will have serious implications for the wider ecosystem.
How the negotiations pan out remains to be seen, but DCG’s efforts to resolve the issue quickly and efficiently bodes well for the future of the company and the industry as a whole.
Former JPMorgan and Goldman Sachs exec joins DCG as CFO
Reuters recently reported that Digital Currency Group has announced the appointment of Mark Shifke as its new chief financial officer (CFO).
Shifke has nearly four decades of experience in the financial industry, with a background in mergers and acquisitions, and has previously worked at large financial institutions such as JPMorgan Chase and Goldman Sachs. Prior to joining DCG, Shifke served as CFO of financial services company Billtrust.
Shifke’s appointment comes at a critical time for DCG, which currently faces legal action. DCG owns a portfolio of crypto companies, including crypto news and events site CoinDesk and major digital asset manager Grayscale.
DCG founder and CEO Barry Silbert praised Shifke's strategic vision and leadership in a statement, highlighting his deep financial and fintech experience and the appointment is expected to strengthen DCG's position as a key player in the cryptocurrency industry.