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Qadir AK
Qadir AK
Author
Qadir Ak is the founder of Coinpedia. He has over a decade of experience writing about technology and has been covering the blockchain and cryptocurrency space since 2010. He has also interviewed a few prominent experts within the cryptocurrency space.
- Jan 20, 2023 05:11 UTC
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Big Breaking!! Genesis Global Capital Files for Bankruptcy- Is Crypto Space Ready for the Impact?
Top lending platform Genesis filed for Bankruptcy protection in the southern district of New York late Thursday
The subsidiaries of Genesis Global Capital, LLC and Genesis Asia Pacific Pte. Ltd has also filed for bankruptcy
The bears appear to have geared up and are all set to pull the crypto markets down below the crucial support in the next few hours
The final nail in the coffin appears to have been placed as the much-expected bankruptcy occurred this Thursday. Genesis Global Capital, one of the popular crypto lending platforms that handle a large share of the crypto lending transactions has finally filed Chapter 11 Bankruptcy protection in the New York federal district court.
All of it began with the fallout of the popular crypto exchange FTX which created a ripple of fallouts that largely impacted Genesis. The platform quickly halted the customer withdrawals which created a huge FUD among the market participants. Moreover, the platform also announced a layoff of 30% or 145 employees which signaled the drowning of the financial stands of the platform which could have resulted in bankruptcy.
Genesis in filing listed to hold assets and liabilities between $100 million and $500 million between 1 to 49 creditors. The major creditor’s lists include,
- Gemini: $765 million
- Decentraland; $55 million
- VanEck: $53 million
- Abra: $30 million
- Cumberland: $18 million
- Stellar Foundation: $13 million
Gemini being heavily exposed to the Genesis fallout carried multiple attempts to recover its customers’ funds which were stuck. But eventually failed to do so and hence the founder, Cameron Winklevoss just announced to take legal action against Genesis.
Today’s bankruptcy may have a larger impact on the entire crypto space, especially on Bitcoin as Genesis & Grayscale shares a common parent company DCG. Grayscale operates the Grayscale Bitcoin Trust (GBTC) which currently holds more than $10 billion in Assets under management (AUM. Following the rounds of Bankruptcy, the fear of massive Bitcoin liquidations haunts the crypto space, mainly the assets held by Grayscale which accounts for more than 600,000 BTC.
Terra’s 80,000 BTC slashed the crypto space by nearly 50% and the markets have not yet recovered completely. Therefore, if Grayscale begins to liquidate it may create an acute depression caused by extreme selling pressure that may result in another collapse of the crypto markets soon!
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