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Genesis bankruptcy filing imminent as talks with creditors stall: Report


Cryptocurrency lending company Genesis, a wholly-owned subsidiary of Digital Currency Group (DCG), is on the verge of bankruptcy after negotiations between the company ran into difficulty with the banks. creditors could not make progress, according to multiple reports.

Bloomberg, citing sources close to the situation, reported today that Genesis is preparing to file for bankruptcy protection as soon as this week. so bright first warning of such a move the following November Client’s withdrawal is suspended follow The collapse of the crypto exchange FTX.

Genesis and parent company DCG have been unsuccessful in reaching an agreement with creditors despite several proposals, according to Bloomberg.

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Block also reported today that Genesis and its creditors are negotiating a Chapter 11 bankruptcy plan. As part of the proposed settlement, creditors will agree to a one- to two-year deferral of payments and receive cash and equity from DCG as part of the agreement, Block reported, citing unnamed sources.

Neither Genesis nor DCG responded immediately decryptionrequest comment.

The collapse of FTX left holes in the balance sheets of many other crypto industry companies, bring a spread has spread since early November, Genesis said in November that it have $175 million worth of cryptocurrency locked in FTX, currently undergo its own Chapter 11 bankruptcy proceedings. However, in general, Genesis has a 3 billion USD shortfallaccording to the Financial Times.

Gemini crypto exchange claims that Genesis holds more $900 million in customer money from the Gemini Earn program, which allows users to earn interest on deposited assets. Gemini Earn users have not been able to access those funds since Genesis stopped withdrawing.

That led to an open war of words Between Gemini co-founders Tyler and Cameron Winklevoss and DCG founder and CEO Barry Silbert, tensions have grown in recent weeks when the Winklevoss brothers demanded Silbert’s resignation. Openly spitting After a few weeks of negotiations between the company and its creditors.

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Last week, the US Securities and Exchange Commission charge both Genesis and Gemini with the offering of unregistered securities related to Gemini Earn.

On January 4, Gemini Interim CEO Derar Islim said that company needs more time to try and find a solution to its liquidity crisis. Tomorrow, Genesis to cut 30% of staff to reduce costs and stabilize the company in times of crisis.

DCG is consider selling the property from its venture portfolio, which includes stakes in more than 200 crypto projects — such as crypto exchange Coinbase and USD stablecoin issuer Circle — to cover the Genesis shortfall, Financial Times report last week.

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