Embattled crypto lender Genesis owes over $3 billion to its collectors, the Monetary Occasions reported on Jan. 12, citing sources accustomed to the matter.
The lender owes $900 million to customers of Gemini’s Earn program, over $303 million to Dutch trade Bitvavo, in addition to cash to customers of crypto financial savings agency Donut.
On Jan. 10, Bitvavo rejected DCG’s proposal to repay 70% of its debt
Genesis is in talks with funding financial institution Moelis to discover its choices however exterior funding makes an attempt have failed up to now. Genesis’ father or mother firm Digital Foreign money Group (DCG) is looking for to unload its enterprise capital portfolio to lift funds, in accordance with the FT report.
DCG, which additionally controls crypto media outlet Coindesk and funding supervisor Grayscale, has invested in round 200 crypto tasks throughout greater than 30 nations.
The preferred investments, in accordance with the DCG web site, embrace exchanges Coinbase and Kraken, crypto investigation platform Chainalysis, Decentraland, USD Coin (USDC) issuer Circle, and Dapper Labs, the agency behind NBA High Photographs and CryptoKitties non-fungible token (NFT) collections. DCG additionally invested $250,000 within the now-defunct crypto trade FTX in July 2021.
Nameless sources advised FT that DCG’s enterprise investments are illiquid since buyers tightened funding amid a worldwide financial downturn. Furthermore, the collapse of FTX has additionally made buyers cautious of funding crypto tasks. Because of this DCG’s portfolio may take a while to promote.
Even when DCG efficiently sells its enterprise capital holdings, it might not be sufficient to cowl Genesis’ excellent money owed. FT sources pegged the worth of DCG’s portfolio at round $500 million, which is lower than 17% of Genesis’ debt burden.
Genesis halted withdrawals in November on the heels of the FTX implosion, citing “unprecedented market turmoil.” The Winklevoss twins, founders of Gemini, have been engaged in a public feud with DCG CEO Barry Silbert over Genesis’ debt. The Winklevii referred to as for the elimination of Silbert earlier this week, stating that he was “unfit” to run the conglomerate.
DCG is at present being investigated by the U.S. Division of Justice in addition to the Securities and Alternate Fee over inner cash transfers to Genesis.
