Genesis, the renowned crypto lender, was reported to owe close to $900 million to Gemini, a crypto exchange platform. Now, customers who have their funds locked in on Genesis have presented that Genesis now cumulatively owes $1.8 billion to Genesis’ creditors.
The law firm Proskauer Rose represents the other group of Genesis creditors. The loans for this section of Genesis creditors have totaled $900 million. It is now being claimed that the $1.8 billion is a tentative number because the loan amount could increase.
Recouping Funds From Genesis
The list of companies trying to recover funds from Genesis is rising. Gemini has recently formed a creditor’s committee to regain the lost funds from the crypto lender and its parent company, Digital Currency Group (DCG).
Gemini formed this committee after the crypto broker was taken unawares by the crash of Sam Bankman-Fried’s FTX crypto group in the previous month. Additionally, Digital Currency Chief Executive Officer Barry Silbert spoke to the shareholders in October. At that time, the executive said:
Venture capital company Digital Currency Group, which owns Genesis Trading and cryptocurrency asset manager Grayscale, owes $575 million to Genesis’ crypto lending arm.
Third Group Yet To Present Numbers
The Proskauer Rose law firm has presented the number as being $1.8 billion. There is a certainty that this is not the final number. The number would increase through the ad hoc group, which is now represented by Kirkland & Ellis. Ellis has also represented companies such as Celsius and Voyager Digital. Another famous law firm, Latham & Wilkins, represents Gemini’s customers.
In its letter to the investors, which was sent last month, Genesis mentioned that it:
(…) begun discussions with potential investors and our largest creditors and borrowers, including Gemini and DCG [Digital Currency Group], to agree on a solution that shores up our lending business’ overall liquidity and addresses clients’ needs.
In the month of November, Genesis Global Capital suspended customer withdrawals on its lending platform. The reason provided was the sudden collapse of the crypto exchange platform FTX.
The beleaguered crypto trading platform FTX filed for bankruptcy protection in the US in the middle of last month. The failure of FTX has been accounted for as one of the major blows to the crypto industry holistically, and it had a considerable impact on the broader market.
The crash had made traders take out billions from the platform in only three days. Furthermore, Binance canceled its rescue deal to buy out FTX at the last minute.