• Crypto lender Genesis Global has filed for Chapter 11 bankruptcy in the Southern District of New York.
• The firm has estimated liabilities of $1 billion to $10 billion and assets in the same range.
• Genesis has $150 million in cash on hand to support ongoing business operations and facilitate the restructuring process.
Crypto lender Genesis Global has become the latest firm to throw in the towel following the collapse of FTX, filing for Chapter 11 bankruptcy protection in New York. According to their Jan. 19 filing, the firm has estimated liabilities of $1 billion to $10 billion and assets in the same range. A press release on the same day claimed the company had been engaged in discussion with its advisors, creditors, and corporate parent Digital Currency Group (DCG) to evaluate the most effective path to preserve assets and move the business forward.
Genesis is now commencing a court-supervised restructuring process to further advance these discussions. The company is contemplating a „dual track process“ pursuing a „sale, capital raise, and/or an equitization transaction“ that would enable the business to emerge under new ownership. The derivatives, spot trading, broker-dealer and custody businesses of Genesis are not part of the Chapter 11 proceedings and will continue operations according to the firm.
The firm also has more than $150 million in cash on hand that it believes will provide ample liquidity to support ongoing business operations and facilitate the restructuring process. This cash could be used to pay creditors and ensure the continued operation of the business. Additionally, the firm has revealed plans to restructure its debt and potentially acquire new capital to allow it to continue operations.
Despite the filing for bankruptcy, the company is optimistic that the restructuring process will allow it to emerge from bankruptcy in a stronger position. Genesis seeks to emerge under new ownership, with a lower debt burden, and increased liquidity to support its ongoing operations. It remains to be seen how successful the restructuring process will be, but the company appears to have a viable plan in place.