Genesis, a major cryptocurrency lending firm and subsidy of the Digital Currency Group (DCG), filed for bankruptcy last week, global media reported.
Recently, US regulators from the Securities and Exchange Commission hit the crypto company with charges of illegal and unregulated cryptocurrency sales.
Cameron Winklevoss, Gemini co-founder, tweeted on Friday that Genesis Global Capital LLC had “filed for bankruptcy under Chapter 11.”
He added, hitting out at Genesis: “We have been preparing to take direct legal action against Barry, DCG, and others who share responsibility for the fraud that has caused harm to the 340,000+ Earn users and others duped by Genesis and its accomplices.”
The Tea on Genesis
Issues erupted after now-bankrupt crypto trading platform FTX collapsed in mid-November due to a massive liquidity crunch. Much of FTX’s troubles have surfaced due to fraud charges against disgraced ex-CEO and founder, Sam Bankman-Fried, and several key executives.
The news comes after Genesis announced mass redundancies of roughly 30 percent of its workforce. It later faced a massive row with crypto exchange Gemini due to its Earn programme, leading to a loss of $900 million USD in deposited assets. It initially offered investors up to 7.4 percent interest on holdings.
Genesis has locked out hundreds of thousands of Earn users after halting withdrawals in November, citing market volatility and instability.
Genesis interim chief executive, Derar Islim, said in a statement: “We look forward to advancing our dialogue with DCG and our creditors’ advisers as we seek to implement a path to maximise value and provide the best opportunity for our business to emerge well-positioned for the future.”
Along with FTX, Genesis joins Three Arrows Capital, BlockFi, and Voyager, among others, in the growing list of defunct cryptocurrency enterprises.
