The lending unit of crypto firm Genesis filed for U.S. bankruptcy protection from creditors on Thursday, following the dramatic market downturn that has affected other crypto giants such as FTX FTT/USD and BlockFi.
What Happened: Genesis’ lending unit reported having between $1 billion and $10 billion in assets and liabilities in its filings with a U.S. bankruptcy court.
Genesis Global Capital, one of the largest crypto lenders, stunned its customers on Nov. 16 when it froze customer redemptions after FTX declared bankruptcy.
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Cameron Winklevoss, the co-founder and president of crypto exchange Gemini GUSD/USD, who had accused Genesis parent DCG and its CEO Barry Silbert of defrauding his firm said the bankruptcy was “a crucial step towards” recovering Gemini Earn users’ assets.
Winklevoss added that Silbert and DCG continue to deny creditors a reasonable agreement despite negotiations for an “acceptable solution.”
“The good news is that, by seeking the protection of the bankruptcy court, Genesis will be subject to judicial oversight and be required to provide discovery into the machinations that brought us to this point,” Winklevoss tweeted, adding that his company had been “preparing to take direct legal action against Barry, DCG, and others.”
Winklevoss said that unless Silbert and DCG make a fair and reasonable offer to creditors, they would face a lawsuit “imminently.”