(AP) – Crypto lending firm Genesis is seeking Chapter 11 bankruptcy protection as weak prices and a decline in FTX continue to roil the industry.
Genesis Global Holdco LLC and two of its lending operating subsidiaries, Genesis Global Capital LLC and Genesis Asia Pacific Pte. Ltd. Ltd., have filed for bankruptcy protection in the Southern District of New York. Genesis said its other subsidiaries involved in derivatives, spot trading and custody business, and Genesis Global Trading, were not included in the filing and continue to conduct client trading operations.
Genesis said it has more than $150 million in cash on hand, providing ample liquidity to support its continued business operations and facilitate its restructuring.
Last week, the Securities and Exchange Commission tracked down Genesis Global Capital and cryptocurrency exchange Gemini, claiming they were selling unregistered securities through a popular program that was supposed to give high interest payments on crypto deposits. .
The SEC lawsuit is part of a broader crypto crackdown by multiple U.S. government agencies after last year’s sharp drop in cryptocurrency prices, leaving mostly retail investors exposed to billions of dollars in losses. I’m here.
Genesis’ restructuring plans include the creation of trusts to distribute assets to creditors.
The plan considers a dual-track process and considers any sale, capital raising or other transaction that could allow the business to emerge under new ownership. The New York-based company will initiate marketing and sales processes to monetize Genesis Global Holdco’s assets or raise capital using transaction proceeds to pay creditors. If this process does not result in a sale or capital increase, the creditors will receive ownership of the restructured Genesis Global Holdco.
“We have made great strides in improving our business plan to resolve liquidity issues caused by recent extraordinary challenges in the industry, including the default of Three Arrows Capital and the collapse of FTX. , a court restructuring is the most effective way to protect assets and create the best possible outcome for all of Genesys’ stakeholders,” said the interim CEO, who assumed the role in August. Della Islam said in a statement.
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