DELIVERING ALPHA -- CNBC?s Melissa Lee moderates the Tales from the Crypto panel at the CNBC Institutional Investor Delivering Alpha conference July 18th in NYC. (Seated: Barry Silbert, Founder and Chief Executive Officer, Digital Currency Group). -- (Photo by: Heidi Gutman/CNBC/NBCU Photo Bank/NBCUniversal via Getty Images)

All The Latest As Genesis Prepares For Bankruptcy

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Crypto lending firm Genesis Global Capital is reportedly preparing to submit an official Chapter 11 bankruptcy filing this week following months of speculation, according to a Bloomberg report.

In November 2022, the firm was scrambling to raise US$1 billion investor capital for its trading subsidiary Genesis Trading. At the time, it was stated that plans for bankruptcy were not on the immediate horizon.

Discussions with potential investors remain ongoing, as Bloomberg reports Genesis have been locked in “confidential negotiations with various creditor groups amid a liquidity crunch.”

Owned by Digital Currency Group, Genesis was initially swept up in the bankruptcy of crypto exchange Three Arrows Capital (3AC) from whom they are owed US$2.36 billion.

Genesis became more financially vulnerable as a consequence of the FTX saga to the tune of US$175 million, with funds in Alameda Research yet to be disclosed.

On January 12th, the US Securities and Exchange Commission charged Genesis and crypto exchange Gemini for the unregistered sale of security assets via Gemini’s Earn crypto lending programme.

CEO Of Digital Currency Group Barry Silbert has been embroiled in a Twitter grudge match with the Winklevoss twins, founders of crypto exchange Gemini since December last year.

According to Cameron Winklevoss, Genesis owes the Gemini US$900 million. In response, DCG called the claim a “desperate and unconstructive publicity stunt.”

According to The Block, Genesis are now in the process of negotiating a prepackaged bankruptcy deal which could see creditors including the Winklevoss twins financially compensated via cash payments and share equity in Digital Currency Group.