hole of 3.4 billion for Genesis- Corriere.it

Genesis Global Holdco, one of the most important cryptocurrency platforms, has filed for bankruptcy. Together with two subsidiaries (Genesis Global Capital and Genesis Asia Pacific), the giant requested the remembrance of the so-called “Chapter 11”, the US law on financial bankruptcy which allows companies to restructure their debt. After Ftx, therefore, another digital currency exchange collapses, which inevitably suffers from the prices (Bitcoin, for example, which went from almost 70 thousand dollars in January 2021 to the current 20 thousand). The exposures that Genesis would be unable to address would amount to $3.4 billion, even in addition to those of Ftx (equal to 3.1 billion dollars). An overdraft that affects 50 major creditors, including, as third on the list, the Chinese Babel Finance, a provider of financial services for cryptocurrencies, which boasts a credit of 150 million dollars.

The Crisis of Genesis

Genesis suffered heavy losses after loans made to Alameda Research, the holding company of Ftx, and digital currency hedge fund Three Arrows Capital. Both realities failed. On the hypothesis of bankruptcy for Genesis there were rumors for several months. Neither the dismissal of 30% of the personnel which took place at the beginning of January was enough to avert it. We face unprecedented industry challenges, a company spokesperson told the Wall Street Journal. The scenario is indeed complex: geopolitical issues have led to inflation, especially a sharp rise in energy costs; this has prompted the central banks to implement ever more stringent monetary policies and consequently to less liquidity circulation. Main cause of the announced bankruptcy of Genesis.

The crypto properties of Digital Currency Group

Genesis Global Holdco is owned by the Digital Currency Group conglomerate, which owns other companies in the crypto world. As he explains Milan Financethe firm also controls crypto asset manager Grayscale Investments, crypto news site CoinDesk, mining and staking organization Foundry, cryptocurrency exchange Luno, data platform TradeBlock, wealth management company HQ and Dcr Real Estate. inevitable, therefore, that the decline in the sector affects the holding. As early as November it would have stopped paying repayments and disbursing new loans. The managing director of Digital Currency Group, Barry Silbert, also stated at the Wall Street Journal that the company owes Genesis 447.5 million in dollars and 4,550 bitcoins, for a value of approximately 78 million.

The origin of the collapse

It all started, as announced, with the collapse of the giant Ftx, Sam Bankman-Fried’s cryptocurrency exchange, currently under trial, where Genesis had part of its funds. Since that day, Ftx would have recovered an amount equal to 5 billion dollars in cash and crypto-assets, but the sum is nowhere near what he owes his creditors. Gemini Trust, founded by Cameron and Tyler Winklevoss, also seems to have ended in the storm.