History
2023
Bankruptcy application
On January 19, 2023, Genesis Global, one of the largest cryptocurrency lenders, announced the start of bankruptcy proceedings. This is expected to allow restructuring and strengthening the business in the future.
A bankruptcy petition was filed in court in the Southern District of New York on behalf of Genesis Global Holdco Holding and its two subsidiaries - Genesis Global Capital and Genesis Asia Pacific Pte. Other trading related subsidiaries do not participate in the procedure, and therefore continue to provide services to customers. The reorganization will take place in accordance with Article 11 of the US Bankruptcy Code. The official statement says that this procedure is necessary in light of the current situation in the cryptocurrency market.
 | While we have made significant progress in streamlining business plans to address liquidity issues caused by recent industry developments, including Three Arrows Capital's default and FTX's bankruptcy, restructuring in court represents the most effective path to preserve assets and achieve the best results for all stakeholders, Genesis notes. |  |
The documents sent to the court say that the number of Genesis creditors exceeds 100 thousand. The volume of the company's cash assets is over $150 million: this, as stated, should be enough to maintain current business operations and ensure the restructuring process. Genesis has filed a number of petitions to continue its day-to-day operations as normal. At the same time, payments on debts and the issuance of new loans have been suspended. The company is negotiating with consultants to assess the most effective way to maintain assets and promote the business. It is assumed that the restructuring will ultimately make it possible to pay off all debts.[1]
Dismissal of 30% of employees
In early January 2023, one of Genesis' largest cryptocurrency lenders laid off 30% of its staff and is considering filing for bankruptcy amid the latest financial turmoil.
The conglomerate has faced a slew of bad business decisions and is on the verge of bankruptcy after mounting pressure from creditors. According to the Wall Street Journal (WSJ), the number of layoffs can reach 60 people, and insiders familiar with the situation note that the layoffs will affect several departments.
| | As we continue to overcome the industry's unprecedented challenges, Genesis has made the difficult decision to reduce headcount worldwide... We truly appreciate the hard work of our talented and dedicated team as we continue to work to determine the best results for the business, customers and Genesis employees in the long term, a Genesis spokesperson said. | |
The news of the downsizing comes amid a claim by the company's interim CEO Derar Islim that Genesis is asking for an extension to resolve its financial crisis. With a total of 145 Genesis employees, cutting the budget through April 2023 is one of Islim's strategies to address liquidity concerns.
An insider told the WSJ news agency that the affected exchange had Genesis suspended bonuses and social subsidies for employees. Moreover, an internal memo for employees showed that the company refused to pay salaries in fiat and will make payments in stable coins, urging all employees to create an account on the exchange.
Genesis's problems began with the bankruptcy and liquidation of the cryptocurrency hedge fund Three Arrows Capital in 2022, to which the company provided a loan of $2.4 billion. A few days after the collapse of the hedge fund, Genesis cut 20% of its employees, and the company's CEO Michael Moro resigned.[2]
Notes
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