Crypto lender Genesis preparing to file for bankruptcy — Bloomberg News

Jan 18 (Reuters) — Cryp­tocur­ren­cy lender Gen­e­sis Glob­al Cap­i­tal is plan­ning to file for bank­rupt­cy as soon as this week, Bloomberg News report­ed on Wednes­day, cit­ing peo­ple with knowl­edge of the situation.

A bank­rupt­cy fil­ing has been expect­ed for weeks, after the com­pa­ny froze cus­tomer redemp­tions on Nov. 16 fol­low­ing the down­fall of major cryp­tocur­ren­cy exchange FTX.

The col­lapse of FTX in Novem­ber has claimed sev­er­al vic­tims includ­ing cryp­to lender Block­Fi and Core Sci­en­tif­ic Inc , one of the biggest pub­licly trad­ed cryp­to min­ing com­pa­nies in the Unit­ed States, both of which filed for bank­rupt­cy pro­tec­tion in the fol­low­ing months.

Gen­e­sis, its par­ent Dig­i­tal Cur­ren­cy Group and cred­i­tors have exchanged sev­er­al pro­pos­als, but have so far failed to come to an agree­ment, the Bloomberg report said, adding that Kirk­land & Ellis and Proskauer Rose have been advis­ing groups of creditors.

Gen­e­sis did not imme­di­ate­ly respond to a Reuters request for comment.

Gen­e­sis is also locked in a dis­pute with Gem­i­ni, found­ed by the iden­ti­cal twin cryp­to pio­neers Cameron and Tyler Winklevoss.

Gem­i­ni offered a cryp­to lend­ing prod­uct called Earn in part­ner­ship with Gen­e­sis, and now says Gen­e­sis owes it $900 mil­lion in con­nec­tion with that product.

The U.S. Secu­ri­ties and Exchange Com­mis­sion last week said it had charged Gen­e­sis and Gem­i­ni with ille­gal­ly sell­ing secu­ri­ties to hun­dreds of thou­sands of investors through their cryp­to lend­ing program.

Report­ing by Niket Nis­hant and Mehnaz Yas­min in Ben­galu­ru; Edit­ing by Sri­raj Kalluvila

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