The recommendation and decision to file for bankruptcy protection were made by a special committee of independent directors.
Genesis Capital’s parent business, Digital Currency Group, denied any involvement in Genesis’ bankruptcy filing in a statement on January 20. DCG claims that a bankruptcy filing was recommended and ultimately decided upon by an independent committee of directors.
Genesis will be able to seek the reorganization of debts, assets, and other business operations by filing for bankruptcy. The corporation put the range of its assets and liabilities at $1 billion to $10 billion.
Genesis Global Holdco, Genesis Global Capital, and Genesis Asia Pacific, collectively known as Genesis Capital, are the only lending firms affiliated with Genesis that have applied for bankruptcy protection. Both Genesis Global Trading and the spot and derivatives trading division of Genesis will continue to be in operation.
In addition to its other companies, Grayscale Investments, Foundry Digital, Lino Group Holdings, CoinDesk, and TradeBlock Corporation, DCG stated that it planned to carry on with business as normal.
DCG acknowledged that the company owes “$526 million due in May 2023 and $1.1 billion under a promissory note due in June 2032” in a letter to shareholders on January 17. In the course of restructuring, the company stated that it plans to settle its debts to Genesis Capital.
According to Cointelegraph, to maintain liquidity, the letter also declared a halt to quarterly dividend payments.
After the withdrawal suspension in November, which it attributed to the “extraordinary market instability” that followed FTX’s demise, Genesis’ issues became obvious.
Later, the business admitted it had $175 million trapped in an FTX account. Customers of Gemini were impacted by the withdrawal suspension, which led to requests for the DCG board to fire Barry Silbert as CEO.