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The consequences of FTX's shutdown persist, and it appears that Genesis will not be the final event to occur as a result.
Genesis, a crypto lending and trading organization comprising over 200 businesses, has filed for bankruptcy. This follows the collapse of the FTX exchange, according to the Financial Times. Genesis, one of FTX's biggest lenders, had previously halted withdrawals in November, and also laid off 30% of its staff earlier this month. Genesis is a member of the Digital Currency Group (DCG), which also owns the crypto asset management firm Greyscale and crypto-focused news outlet CoinDesk. The bankruptcy filing comes after months of uncertainty for the company.
The Financial Times reported earlier this month that Genesis owes creditors over $3 billion, including nearly $1 billion to customers of the Winklevoss crypto exchange Gemini. Its Chapter 11 bankruptcy filing lists assets and liabilities in the hundreds of millions for Genesis, while one of its subsidiary, Genesis Global Capital, has assets and liabilities in the billions, with over 100,000 creditors.
"We are eager to continue our discussions with DCG and our creditors' representatives as we work towards implementing a strategy that maximizes value and sets our business up for success in the future," said Derar Islim, interim CEO of Genesis, in a statement. "Going through the restructuring process in court offers the most effective way to protect our assets and secure the best outcome for all stakeholders of Genesis."
In November, reports surfaced that Genesis was attempting to secure over $1 billion in funding from various investors, including Binance. However, the exchange reportedly decided not to invest, according to The Wall Street Journal. Genesis currently states that it has over $150 million in cash to support its operations and restructuring efforts.
Like the impact of FTX's bankruptcy on other areas of the crypto industry, and the similar effects of Three Arrows Capitol's downfall on Genesis' own liquidity issues, it is possible that Genesis' struggles could further spread throughout the crypto market.
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