In a January 20 statement, Genesis Capital’s parent company, Digital Currency Group (DCG), denied involvement in Genesis’ bankruptcy filing. According to DCG, a special committee of independent directors recommended and decided to file for Chapter 11 bankruptcy protection.
Filing for Chapter 11 will allow Genesis to seek reorganization of debts, assets and other business activities. The company estimates liabilities of $1 billion to $10 billion, along with assets in the same range. DCG noted in a statement:
“Genesis has an independent management team, legal advisors, and financial advisors, and appoints a special committee of independent directors, which is responsible for the restructuring of Genesis Capital, and which recommends and decides whether Genesis Capital files for Chapter 11. DCG or not. any of its employees, including those sitting on Genesis’ board of directors, were involved in the decision to file for bankruptcy.
Only Genesis’ credit entities – Genesis Global Holdco, Genesis Global Capital and Genesis Asia Pacific, collectively known as Genesis Capital – have filed for bankruptcy protection. Genesis Global Trading and Genesis’ spot and derivatives trading entities will remain operational.
DCG Statement on Genesis Capital’s Chapter 11 Bankruptcy Filing: https://t.co/6SsWj4zo3R pic.twitter.com/j9e8R3mMZv
– Digital Currency Group (@DCGco) January 20, 2023
related: Crypto Biz: DCG’s “Carefully Crafted Deception Campaign”?
DCG said it intends to continue operating as usual, along with other subsidiaries, including Grayscale Investments, Foundry Digital, Lino Group Holdings, CoinDesk and TradeBlock Corporation.
In a letter sent to shareholders on January 17, DCG confirmed it has debt of “$526 million due in May 2023 and $1.1 billion under promissory notes due in June 2032.” The company noted that it intends to address its obligations to Genesis Capital during the restructuring. The letter also announced a halt to monthly dividend payments to maintain liquidity, Cointelegraph reported.
Genesis’ problems became apparent after the withdrawal in November, which was blamed on the “unprecedented market turmoil” that followed the collapse of FTX. The company later announced that $175 million was stuck in the FTX account. The withdrawal prompted Gemini clients to demand that DCG’s board remove Barry Silbert as CEO.