Crypto Firm Genesis' Lending Unit Files for Bankruptcy Protection

The lending unit of crypto firm Genesis filed on Thursday for U.S. bankruptcy protection from creditors, toppled by a market rout along with the likes of exchange FTX and lender BlockFi.

Genesis' lending unit said it had both assets and liabilities in the range of $1 billion to $10 billion in its filings with the U.S. bankruptcy court.

Genesis Global Holdco, the parent group of Genesis Global Capital, also filed for bankruptcy protection, along with another lending unit Genesis Asia Pacific.

Genesis Global Holdco said in a statement that it would contemplate a potential sale or a equitization transaction to pay creditors.

It added that Genesis' derivatives and spot trading, broker dealer and custody businesses were not part of the bankruptcy process, and continue their client trading operations.

Genesis's bankruptcy filing is the latest in a cascade of crypto failures and steep job cuts triggered by plunging prices last year.

Genesis was already locked in a dispute with Gemini Trust Co over a crypto lending product called Earn that they jointly offered. Gemini' twin founders have said Genesis owed more than $900 million to some 340,000 Earn investors. 

Its two biggest borrowers were Three Arrows Capital, a Singapore-based crypto hedge fund, and Alameda Research, a trading company closely affiliated with FTX, as reported. Both are in bankruptcy proceedings.

Source: Reuters