Crypto bank Genesis today announced it has filed for bankruptcy. Genesis Global Holdco, LLC and two of its subsidiaries, Genesis Global Capital, LLC and Genesis Asia Pacific Pte. Ltd. filed for filed for a Chapter 11 voluntary petition in a Manhattan court.
The crypto company had been in talks with creditors for some time and after several rejected proposal, the company filed for bankruptcy protection on late on Thursday. The events followed a liquidity crisis, triggered by the collapse of FTX last year.
According to the official announcement, Genesis’s derivatives and spot trading, broker dealer and custody businesses are not part of the bankruptcy proceedings and continue client trading operations.
As part of its Chapter 11 filing, the company has formed a roadmap to exit which features a framework for a global resolution of all claims the creation of a trust.
Paul Aronzon, an independent director at Genesis, said:
We have crafted a deliberate process and roadmap through which we believe we can reach the best solution for clients and other stakeholders. We look forward to advancing our dialogue with DCG and our creditors’ advisors as we seek to implement a path to maximize value and provide the best opportunity for our business to emerge well-positioned for the future.
Derar Islim, Interim CEO, Genesis, added:
While we have made significant progress refining our business plans to remedy liquidity issues caused by the recent extraordinary challenges in our industry, including the default of Three Arrows Capital and the bankruptcy of FTX, an in-court restructuring presents the most effective avenue through which to preserve assets and create the best possible outcome for all Genesis stakeholders. We deeply appreciate our clients’ ongoing patience and partnership as we work towards an equitable solution.
Earlier in January, US Securities and Exchange Commission charged Gemini and Genesis for unregistered offer and sale of securities to retail investors.
