Genesis hearing set for January 23 as Digital Currency Group denies involvement in bankruptcy filing


Share:
  • Genesis filed for bankruptcy on Friday, two months after the crypto lender halted withdrawals due to the FTX collapse.
  • Stellar Foundation emerged as one of Genesis’ largest creditors with a $13 million claim.
  • Genesis and Gemini were recently charged by the SEC for violating Securities law by offering unregistered securities through their Earn program.

Genesis Global Capital emerged as one of the most highly impacted crypto companies from the FTX collapse leading to the lending platform filing for bankruptcy. The crypto lender’s parent company Digital Currency Group and its CEO Barry Silbert who were voicing support for Genesis, also pulled back following the bankruptcy filing.

Genesis prepares for hearing

Less than 24 hours after filing for bankruptcy on Friday, court filing indicates that Genesis Global Capital’s first day hearing in the case is set for January 23. The Chapter 11 proceedings will begin on Monday, with Digital Currency Group backing off, leaving Genesis to defend itself.

Barry Silbert was always at the forefront when it came to Genesis during their bouts with Gemini founder Cameron Winklevoss. However, at the moment, both Silbert and DCG stood far away from the bankrupt crypto lender. In a statement, DCG stated,

“Genesis has its own independent management team, legal counsel, and financial advisors, and appointed a special committee of independent directors, who are in charge of the Genesis Capital restructuring, and who recommended and decided that Genesis Capital file chapter 11. Neither DCG nor any of its employees...were involved in the decision to file for bankruptcy.”

The statement went on to mention that Digital Currency Group still owes Genesis Capital about $526 million, which is due in May 2023, and another $1.1 billion in the form of a promissory note which is set to mature in June 2032. Regardless DCG stated that it would work with Genesis to help the crypto lender’s creditors.

On the other hand, both Genesis and Gemini are currently facing charges from the Securities and Exchange Commission (SEC). According to the regulatory body, the companies violated the securities law with their Earn program as they were found selling unregistered securities to retail investors.

Stellar becomes a victim

Genesis clarified that of Genesis multiple branches of the lending entities have filed for chapter 11 bankruptcy. Its Global Trading arm and spot and derivatives trading arm continue to remain operational and unimpacted.

Although Stellar Development Foundation did emerge as one of the four biggest creditors of Genesis, claiming almost $13 million against Genesis, the foundation stated that the amount was minuscule in comparison to its treasury.

Stellar treasury currently holds close to 30 billion XLM tokens which at the moment are worth more than $200 million. This is why the foundation is bearing no impact from Genesis’ bankruptcy filing.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Join Telegram

Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended content


Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended Content

Editors’ Picks

Ethereum (ETH) holders gear up for Shanghai hard fork, will token unlock be delayed?

Ethereum (ETH) holders gear up for Shanghai hard fork, will token unlock be delayed?

Ethereum network’s key upgrade, the Shanghai hard fork, is planned to go live on April 12. This is the most significant event since the altcoin’s transition to Proof-of-Stake, widely known as the Merge.

More Ethereum news

Sandbox whale moves $260m of SAND to new address on Day 2 of Metaverse Fashion Week

Sandbox whale moves $260m of SAND to new address on Day 2 of Metaverse Fashion Week

The Sandbox stands among the leading metaverse platforms, boasting commendable price performance in 2023, having risen almost 70% year-to-date. The metaverse project has also scored notable high-profile partnerships. 

More Sandbox News

This is how bearish whales threaten MATIC’s bullish potential, is a 10% plunge underway?

This is how bearish whales threaten MATIC’s bullish potential, is a 10% plunge underway?

Polygon MATIC price is trading with a bearish bias in lower timeframes, but bulls are leading in the higher timeframes. The network has recorded strong retail demand and market reaction following the Polygon zkEVM product launch.

More Polygon News

Shiba Inu could rise 15% by the end of the week, here’s why

Shiba Inu could rise 15% by the end of the week, here’s why

Shiba Inu price has recovered from a massive sell-off earlier in the week. The revival comes as SHIB takes advantage of the broader rally in the crypto industry, with Bitcoin (BTC) steadily peeling off its losses by rising 5.33% in the last 24 hours. 

More Shiba News

Bitcoin: Should you trust this BTC sell signal or wait for $34,000?

Bitcoin: Should you trust this BTC sell signal or wait for $34,000?

Bitcoin price shows a clear picture of its rally after it breached a long-term bullish pattern in mid-January. As the rally takes a breather, sell signs have started to emerge, which is putting investors in a confused state. 

Read full analysis

BTC

ETH

XRP