Crypto lender Genesis files for bankruptcy after FTX collapse
Crypto lender Genesis has filed for bankruptcy, becoming the latest victim of the global crypto meltdown.
Cryptocurrency lender Genesis has filed for bankruptcy in the US, becoming the latest victim of the global crypto meltdown after the collapse of FTX.
The company filed for Chapter 11 protection on Thursday in New York alongside two subsidiaries, Genesis Global Holdco and Genesis Asia Pacific.
In its court filing, the lender said it had assets and liabilities in the range of $US1 billion to $10 billion ($AUD1.4 billion to $14.3 billion) and had more than 100,000 creditors, The Wall Street Journal reported.
“Genesis has taken strategic actions to achieve a global resolution to maximise value for all clients and stakeholders and strengthen its business for the future,” the company said in a statement.
The firm has said it would use its $USD150 million ($AUD215 million) cash on hand to fund itself in bankruptcy.
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Earlier this month, the crypto lender laid off 30 per cent of its staff, taking it down to 145 employees.
Genesis’ owner, Digital Currency Group (DCG) said in a statement that neither DCG nor its employees were involved in the decision to file for bankruptcy.
“Genesis has its own independent management team, legal counsel, and financial advisors, and appointed a special committee of independent directors, who are in charge of the Genesis Capital restructuring,” the statement said.
Genesis’s bankruptcy follows the stunning collapse of FTX in November last year.
Disgraced founder Sam Bankman-Fried was arrested on fraud charges in the US last month after reports emerged that his businesses were poorly managed and little more than Ponzi schemes built on “a house of cards”.
The 30-year-old has pleaded not guilty to eight charges involving fraud and money laundering.
He was released on a $USD250 million ($AUD359 million) bond, denying the allegations.
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