It appears that Genesis is set to join the group of bankrupt crypto firms.
Genesis, a cryptocurrency lending firm established in 2013, is reportedly planning to file for bankruptcy.
According to the Bloomberg report shared on January 18th, the person familiar with the matter revealed that Genesis is set to file for bankruptcy as soon as this week.
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It is worth noting that the news comes as no surprise. In November, the company suspended withdrawals and loan applications. After such a move, the crypto community started buzzing, claiming that Genesis was preparing to file for bankruptcy.
At the end of November, Genesis spokesperson denied the rumors and emphasized that the crypto lender has no plans to file for bankruptcy “immediately” and continues to have “constructive conversations with creditors.”
We have no plans to file bankruptcy imminently. Our goal is to resolve the current situation consensually without the need for any bankruptcy filing. Genesis continues to have constructive conversations with creditors.
Despite a relatively confident statement from the company's spokesperson, rumors started surfacing that Genesis is set to consider filing for bankruptcy if it was unable to gather $1 billion worth of emergency loans from investors.
Since then, Genesis has experienced a rocky road to finding the solution to its problems.
At the end of November, the news broke that several US regulators launched an investigation into Genesis Global Capital and other FTX-related firms. At that time, regulators allegedly wanted to determine whether Genesis violated securities laws.
Moreover, in January 2023, Genesis laid off around 30% of its global staff. Regarding the matter, Genesis spokesperson noted that the company continues “to navigate unprecedented industry challenges” and must lay off employees “to move <its> business forward.”
The problems for Genesis did not stop there. On January 12th, the US Securities and Exchange Commission (SEC) sued Genesis and Gemini for selling unregistered securities to retail investors.
