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Seeking Alpha 2023-01-20 07:26:44

DCG’s crypto lending subsidiary Genesis files for bankruptcy protection in New York

Crypto lender Genesis filed for Chapter 11 bankruptcy protection in Manhattan federal court late Thursday night, after suffering crippling losses from the collapses of FTX and hedge fund Three Arrows Capital, according to Thechcrunch reports . The New York-based firm had provided crypto loans to Three Arrows Capital (3AC) and Alameda Research, the hedge fund founded by Sam Bankman-Fried and closely associated with his FTX exchange. Genesis is a part of Barry Silbert’s Digital Currency Group, which has seen mounting problems in recent months. Three separate petitions were filed for Genesis’ holding companies. The company listed over 100,000 creditors with total liabilities ranging from $1.2 billion to $11 billion in a "mega" bankruptcy filing, bankruptcy filings show. In a statement, the company noted that the companies were only involved in Genesis’ crypto lending business. The company’s derivatives and spot trading business will continue unhindered, as will Genesis Global Trading. Genesis had a trading and lending relationship with both Three Arrows Capital and Alameda, FTX’s sister company, DCG’s CEO Barry Silbert shared in a letter from January 10. Genesis is in negotiations with creditors represented by law firms Kirkland & Ellis and Proskauer Rose, sources familiar with the matter told CNBC. Genesis stated it has over $150 million in cash, which it plans to use as liquidity to support its ongoing operations and facilitate its restructuring process.

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