Mi. Feb 1st, 2023

• Cryptocurrency lending and trading firm Genesis has filed for bankruptcy under Chapter 11 in the Southern District of New York.
• The filing includes Genesis Global Holdco, LLC and two of its lending business subsidiaries and does not include other units of the Digital Currency Group.
• Genesis has proposed a roadmap that includes a framework for a global resolution of all claims and the creation of a trust to distribute assets to creditors.

Cryptocurrency lending and trading firm Genesis has filed for bankruptcy under Chapter 11 in the Southern District of New York, USA. After months of struggling, and in an attempt to gain protection from its creditors, Genesis has taken the necessary steps to declare insolvency.

The filing includes Genesis Global Holdco, LLC and two of its lending business subsidiaries, Genesis Global Capital, LLC and Genesis Asia Pacific Pte. Ltd. Notably, the other subsidiaries and units that are involved in derivatives and spot trading as well as custody businesses are not part of the bankruptcy filing, and will continue operating.

Genesis has proposed a roadmap to a potential exit from bankruptcy and the repayment of creditors. This roadmap includes a Chapter 11 plan (the „plan“) that calls for a framework for a global resolution of all claims, and the creation of a trust that will distribute assets to creditors. The plan is based on the pursuit of a sale, capital raise and/or equitization transaction that would enable the business to emerge under new ownership. If a sale or capital raise is not achieved, creditors will receive ownership interests in a reorganized Genesis Global Holdco.

In addition, Genesis has also proposed to use $150 million of cash to fund the company in bankruptcy, with Bloomberg reporting that Genesis Global Capital listed a range of $1 billion to $10 billion for both assets and liabilities as well as over 100,000 creditors — the top 50 unsecured claims amounting to about $3.4 billion.

At this point, Genesis has begun the process of marketing and sale to monetize Genesis Global Holdco, and is looking to repay its creditors. Though the future of Genesis remains uncertain, the company is taking the necessary steps to repay its creditors and emerge stronger than before.

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