• Troubled crypto lender Genesis is likely to file for Chapter 11 bankruptcy this week due to ongoing negotiations with creditors.
• Sources familiar with the matter say negotiations between Genesis and creditors have not progressed as expected.
• The proposed deal includes creditors receiving cash and equity from Digital Currency Group in exchange for a one to two year forbearance period.
Troubled crypto lender Genesis Global Capital, a subsidiary of the Digital Currency Group (DCG), is likely to file for Chapter 11 bankruptcy this week due to ongoing negotiations with creditors. Sources familiar with the matter say that negotiations between Genesis and creditors have not progressed as expected, leaving the company no other choice but to file for bankruptcy.
The proposed deal includes creditors receiving cash and equity from Digital Currency Group in exchange for a one to two year forbearance period. This means creditors would agree to wait a certain amount of time before they can get paid back. Reports suggest that Genesis is trying to raise cash to avoid bankruptcy, but the current liquidity crunch is making it difficult for the company to do so.
Genesis is one of the biggest crypto lenders in the industry and it has been providing loans for the past four years. It has lent out more than $1 billion in crypto assets to its clients and has been involved in several high profile deals. It was also one of the first crypto lenders to offer margin trading.
The filing for Chapter 11 bankruptcy is likely to have far-reaching consequences for the crypto industry. It is expected to have a negative impact on the industry as a whole, as investors and lenders become more cautious about lending to crypto companies. In addition, other crypto lenders may also face increased scrutiny from regulators.
It is unclear what will happen to the loans that Genesis has already given out. It is possible that creditors may not be able to recover the money they have lent out. The company is also likely to face a number of legal issues due to its current financial situation.
It remains to be seen how the situation will unfold in the coming days. However, one thing is clear – the future of Genesis and the crypto industry is uncertain.