It has been reported that Genesis Global Capital is planning to declare bankruptcy as soon as this week.
The news came after Genesis and cryptocurrency exchange Gemini were accused of selling unregistered securities through Gemini’s “Earn” program by the US Securities and Exchange Commission on Jan. 12.
Genesis succumbs to bankruptcy
Genesis previously stated it was considering declaring bankruptcy if it couldn’t raise money owing to a liquidity crisis, according to Bloomberg. It said that Genesis could file for bankruptcy as soon as this week, citing sources with knowledge of the matter.
Many of the reported liquidity concerns could be traced back to the fall of crypto venture capital firm Three Arrows Capital last year.
Cameron Winklevoss, the co-founder of Gemini, has also written multiple open letters on social media criticizing Barry Silbert, the CEO of Digital Currency Group (DCG), and asserting that Genesis owes Gemini $900 million for funds that Gemini lent to it as part of the same program.
In January, Silbert informed the company’s stockholders that Three Arrows owed Genesis $447.5 million as well as 4,550 Bitcoin (BTC), which was then valued around $78 million. Prior to its bankruptcy in November, Genesis also had over $175 million on FTX, which is likely what contributed to the company’s lack of liquidity and probable insolvency.
Winklevoss’ claims, according to DCG, are “malicious, fake, and defamatory attacks.”
Withdrawals were suspended by Genesis following FTX’s bankruptcy filing.