Crypto lender Genesis files for bankruptcy in US

GENESIS, the Bitcoin lender, has filed for bankruptcy making it the biggest cryptocurrency failure since the collapse of Sam Bankman-fried’s FTX.

The company and its subsidiaries, Genesis Global Capital and Genesis Asia Pacific, filed for US Chapter 11 protection.

Genesis Global Capital said it had between $1bn (£810m) and $10bn in both assets and liabilities, as well as more than 100,000 creditors, with the top 50 unsecured claims amounting to about $3.4bn. The company allowed customers to earn interest on cryptocurrency deposits. Yesterday, Cameron Winklevoss, co-founder of cryptocurrency exchange Gemini, threatened to sue the owner of Genesis, claiming its customers had been “duped” into making deposits.

Genesis froze withdrawals amid the collapse of the crypto exchange FTX as customers frantically tried to reclaim their deposits. Genesis admitted it had around $175m in an account with the exchange. FTX imploded amid allegations of fraud and claims its executives misused customer funds. Its founder, Mr Bankman-fried, has pleaded not guilty to fraud. Genesis’s parent company, Digital Currency Group, had been in negotiations with various creditor groups amid a liquidity crunch. Genesis said its trading arm, Genesis Trading, and its UK subsidiary, Genesis Custody, were not part of the bankruptcy. It said the bankruptcy would “provide an optimal outcome for Genesis clients and Gemini”.

A spokesman for DCG said: “Neither DCG nor any of its employees, including those who sit on the Genesis board of directors, were involved in the decision to file for bankruptcy. DCG will continue to operate business as usual.”