Genesis Files for Bankruptcy Owing Over $3 Billion

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  • Genesis has filed for bankruptcy, owing around $3 billion
  • Gemini is one of its biggest creditors at $765 million
  • The company said 10 weeks ago that it was in a position to “drive the industry forward”

Genesis has filed for bankruptcy, owing at least $3 billion to creditors, just over 10 weeks since it calmed fears of exposure to the crypto contagion. Genesis becomes the latest crypto firm to suffer this fate, with its list of creditors including Gemini, Decentraland, and the Stellar Foundation. It was revealed in November that the company was seeking first $1 billion then just $500 million to survive, but clearly it never received this funding, or the actual amount needed was much more than this. Gemini co-founder Cameron Winklevoss responded to the news by saying that Genesis’ owner, the Digital Currency Group can expect a lawsuit in the near future over hundreds of millions owed to Gemini.

Here we produce a timeline of events that has led to the filing.

July 19, 2022

It is revealed that Genesis lent collapsed hedge fund Three Arrows Capital $2.36 billion and is one of its biggest creditors.

November 9, 2022

Genesis says that it has “managed our lending book” and has “no material net credit exposure” to the collapse of FTX. It adds that it is “committed to being a leading digital assets market maker and continuing to drive the industry forward.”

November 16, 2022

Genesis Global Capital halts withdrawals, trapping $900 million of Gemini Earn customers’ money. It cites the “unprecedented market turmoil” caused by the collapse of FTX, resulting in “abnormal withdrawal requests which have exceeded our current liquidity.”

November 18, 2022

Reports emerge that Genesis needs $1 billion of investment to continue. This number is revised down to $500 million on the 22nd.

November 23, 2022

Genesis hires investment bank Moelis & Company to explore its restructuring options, including a potential bankruptcy.

December 8, 2022

Genesis CEO Derar Islim reveals that it will take “additional weeks rather than days for us to arrive at a path forward” regarding withdrawals.

January 3, 2023

A war of words starts between Gemini co-owner Cameron Winklevoss and the CEO of Genesis’ parent company, Digital Currency Group, over the withdrawal issue.

January 13, 2023

Gemini and Genesis are hit with a charge of selling unregistered securities by the Securities and Exchange Commission over Gemini Earn.

January 18, 2023

Multiple reports that Genesis is preparing to file for bankruptcy, owing as much as $3 billion.

January 19, 2023

Genesis filed for Chapter 11 bankruptcy, listing Gemini as a major creditor ($765 million). Cameron Winklevoss threatens legal action if Silbert does not agree to a separate repayment plan for Gemini customers.