Genesis owes creditors at least $1.8 billion

In addition to Gemini Exchange customers who owe $900 million to the platform, several other groups have come forward with claims against the lending company
Genesis owes creditors at least $1.8 billion

Credit platform Genesis, part of the Digital Currency Group (DCG), owes about $1.8 billion to its creditors

On Nov. 16, Genesis Global Capital lending company notified customers that it had temporarily suspended repayments and new loans due to market turmoil and the collapse of FTX. Genesis had $175 million in its account blocked after the FTX collapse. The company served institutional clients and had $2.8 billion in total active loans as of the end of the third quarter of 2022.

Because of the restrictions imposed by Genesis, its partner, U.S. cryptocurrency exchange Gemini, was forced to limit payments to customers under the EARN program, a product that allowed Gemini customers to lend assets to institutional borrowers and earn income.

Genesis owed $900 million to a group of clients using Gemini’s EARN program, according to the article. At the same time, it was reported that another group of Genesis customers had sought legal advice from Proskauer Rose, the amount of damages was also $900 million.

In addition, the source told reporters that another interested group of Genesis users, represented by lawyers from Kirkland & Ellis, appeared in the case. The amount of the claims has not yet been disclosed, but it is known that lawyers from this company represent the interests of Celsius and Voyager Digital.

In late November, Genesis warned investors about possible bankruptcy. The platform engaged in a search for $1 billion in additional funds to help it maintain liquidity.

The collapse of FTX also caused problems for credit platform BlockFi. It suspended operations on Nov. 11 and filed for protection from creditors on Nov. 28. The company said in court documents that it has more than 100,000 creditors, and its liabilities could be valued at between $1 billion and $10 billion.

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