Roger Ver, known as the “Bitcoin Jesus,” is now embroiled in a legal dispute with the defunct cryptocurrency lender Genesis Global.
Ver is often called “Bitcoin Jesus,” because he was one of the early investors in cryptocurrency. He not only adopted it for his companies, but he also advocated it tirelessly.
Why Is Ver Being Sued?
After the Bitcoin advocate failed to settle crypto options transactions before the payment date, Genesis issued a summons to Ver demanding that he pay back at least $20.9 million in damages.
Additionally, the insolvent firm requests that the court reimburse it for the legal expenses it incurred while pursuing the lawsuit against Ver. The Bitcoin evangelist is required to respond to the claims within the following twenty days; failing to do so would result in a default judgment being entered against him.
The petition for bankruptcy was made by a British Virgin Islands-based subsidiary of Genesis, which identified New York County as the location of the trial. According to the complaint, the validity period for the options transactions at issue ended on December 30.
In the event that Ver does not respond to the summons, he will be obliged to make a repayment of at least $20,869,788, in addition to Genesis’ charges, expenditures, and attorney’s fees.
Note that this is not the first time Roger Ver has been sued by a crypto company. The cryptocurrency exchange CoinFlex filed a lawsuit against the Bitcoin advocate in July 2022 for a total of $84 million, claiming that he had failed to settle a margin obligation. Ver was an early investor in Bitcoin and associated firms such as BitPay. He also began pushing for Bitcoin Cash when it arose from a schism in the blockchain.
Troubled cryptocurrency firm Genesis Trading has asked the court to oversee negotiations with creditors to initiate a payout plan no later than May 19, 2023, according to a hearing on Monday. Genesis Trading owes thousands of creditors more than $3 billion, which the company was not able to meet on time due to huge losses incurred during the 3AC and FTX collapse. The company’s situation has been exacerbated by the sustained low crypto prices in the past few months.
Notably, the company has less than $150 million cash at hand to help in the restructuring process. Meanwhile, Genesis Trading intends to engage its parent company Digital Currency Group, one of its largest clients with about $1.65 billion in claims, to repay troubled creditors. Previously, DCG had announced that it has absorbed Genesis Trading’s bad debts incurred from FTX and 3AC’s collapse in a ten-year promissory note.
However, pressure from Gemini Earn Product customers and the ongoing lawsuit filed by the SEC pushed Genesis Trading to file for bankruptcy protection under chapter 11.
“In this case, there are literally hundreds of thousands of individuals whose money is at stake,” said Chris Marcus of Kirkland & Ellis, who represents a group of creditors including Gemini Trust Co.
In the deal talks, Genesis Trading through its attorney noted that it intends to sell itself and distribute the proceeds to creditors. However, if the company sale does not go through during the stipulated time frame, creditors will receive stock compensation in the restructured company. Either way, approval from US Bankruptcy Judge Sean Lane in the Southern District of New York will be required.
Meanwhile, Genesis Trading has, ostensibly, hired a former federal prosecutor to investigate an $850 million loan the company made to Digital Currency Group entities according to Genesis board member Paul Aronzon in a court filing.
The cryptocurrency lending platform, Genesis Global Capital, which is owned and operated by Digital Currency Group, has filed for bankruptcy.
This raises concerns about the potential impact on other companies and services provided by the parent company, as is commonly seen in such circumstances.
What Happens to GBTC?
One of the businesses in question is Grayscale Bitcoin Trust (GBTC), the crypto investment product created by Grayscale, a subsidiary of Digital Currency Group (DCG). In a public statement on January 20, DCG’s owner, Barry Silbert, emphasized that all of the company’s other subsidiaries, including Grayscale, are unaffected by Genesis Global Capital’s financial situation and that this will not change in any manner.
Silbert went on to state that DCG will continue to conduct business as usual and that there will be no disruptions. However, the company owes Genesis roughly $526 million, which is due in May 2023, as well as $1.1 billion that is owed based on a promissory note that is due in June 2032. Silbert also stated that DCG has every intention of meeting its commitments to Genesis even after the company undergoes restructuring.
According to DCG, Genesis has its own independent management team, legal counsel, and financial consultants. DCG also formed a special committee of independent directors, who are in charge of the company’s reorganization, and who suggested and determined that it file for chapter 11 bankruptcy.
The statement also clarified that “neither DCG nor any of its employees, including those who sit on the Genesis board of directors, were involved in the decision to file for bankruptcy.”
Digital currency trading firm Genesis Global filed for bankruptcy on Jan 20, 2023, citing ‘adverse market conditions’. They are likely to complete their bankruptcy by this year May 19. This filing only applies to certain branches of the company and its Global trading and spot and derivatives trading arms are still operational and unaffected. This news has created a stir in the market and the next hearing is on Jan 23.
Background on Genesis Global Trading Bankruptcy Filing
Genesis Global Trading is a digital currency trading firm that was founded in 2013. It grew as a reputed OTC (Over-the-counter) trading firm in the crypto market. On Jan 20, it filed for chapter 11 bankruptcy which causes a stir in the crypto industry. The company is likely to liquidate its assets to pay off the creditors.
Digital Currency Group Denies Involvement
Digital Currency Group (DCG) is a venture capital firm founded by Barry Silbert and has invested in a number of crypto-related companies. The DCG is also the parent company of Genesis Global Trading. DCG responded to the bankruptcy filing stating that it has no involvement in the filing and the decision was made independently by the Genesis management team.
In the statement, they further clarified that DCG still owes Genesis Capital a lot of money. $526 million is due in May 2023 and another $1.1 billion is due in June 2032. DCG said they will help Genesis pay back its creditors very soon.
DCG has also responded to the false accusations made by Gemini related to the Gemini Earn program. They said that the threat of a lawsuit by Gemini is another publicity stunt from Cameron Winklevoss to remove the blame from himself and Gemini. They have also stated that any suggestion of wrongdoing by DCG or any of its employees is baseless and completely false. DCG assured that they will continue to engage in constructive negotiations with Genesis and its creditors with the goal of arriving at a solution that works for all parties.
Stellar – One of the biggest creditors of Genesis
The Stellar Development Foundation, which is one of Genesis’s biggest creditors, claimed almost $13 million from Genesis. However, the foundation stated that this amount is small compared to its overall assets. The Stellar treasury currently holds around 30 billion XLM tokens, which are worth over $200 million. Therefore, the foundation will not be affected by Genesis’s bankruptcy filing.
Impact on the Crypto Market
The bankruptcy filing of Genesis Global Trading has raised a number of questions about the stability of the crypto market. Some have pointed out that the filing is a sign that the market is still in its early stages and that there are still a lot of risks involved. The hearing for this case is set to take place on January 23rd and it will be interesting to see how this plays out and what the ultimate impact on the crypto market will
Genesis Global Capital, the cryptocurrency lending platform owned and operated by DCG, filed for bankruptcy. According to the court document, the company has around 100,000 creditors.
Bybit is one of the major creditors among these entities, with over $152 million in debt that is due through its investment business Mirana. The community has become enraged as a result of the company’s involvement with Genesis.
Bybit CEO Explains
Ben Zhou, the CEO of Bybit, was quick to offer an explanation and clarify that the company did indeed have an exposure of more than $150 million to the failed cryptocurrency lender.
The CEO further said that Mirana only handled a part of Bybit’s assets and that the estimated exposure of $152 million included around $120 million worth of collateralized holdings, both of which Mirana had previously liquidated. Additionally, he promised that he ensured that customer funds are kept separate and that the various products offered by Bybit do not utilize Mirana.
Nevertheless, in spite of Zhou’s reassuring explanations, the community does not seem to be placated. The vast majority of the individuals who commented on his post expressed their need for more clarification on the issue.
Users are requesting that complete transparency be made about the company’s Earn items and the yield generation process. One user in particular raised concerns over Bybit’s connection with Mirana and enquired as to whether or not the company follows a strategy comparable to that of FTX and Alameda.
Genesis, its parent firm DCG, and its creditors have gone back and forth with a number of different approaches, but they have been unable to reach a deal. Due to the substantial amount of money that it owes to its creditors, the failure of the cryptocurrency lender left a mark on the cryptocurrency ecosystem.
Genesis, which filed for bankruptcy today, was in dispute with Gemini exchange. As per the exchange, Genesis owes nearly $900 million to Gemini customers due to its lending product, Earn. While Genesis filed for bankruptcy today it claimed that the first’s liabilities and assets are nearly $1 billion to $10 billion along with 100,000 creditors. The Genesis Global Holdco bankruptcy was followed by its lead business associates, Genesis Global Capital and Genesis Asia Pacific.
Gemini Exchange To Sue Genesis ?
Now, Cameron Winklevoss, Gemini co-founder has threatened to sue Genesis Global along with its parent company, Digital Currency Group. This was confirmed via Cameron’s Twitter account.
As per Cameron, Genesis and Digital Currency Group are using scam as a reason to get rid of $900 million payment to Genesis. Also Cameron explained that the Genesis bankruptcy was much needed as it will help recover Gemenin Earn Users funds.
Followed by Cameron’s threat to sue Genesis, the Crypto lending firm is reported to be planning to complete the bankruptcy by May 19. Furthermore, Cameron has also mentioned that the firm will consider every option to get their funds back from Silbert and DCG.
However, Silbert has not made any statement on what will be his further steps towards DCG’s subsidiaries such as Grayscale Bitcoin Trust, one of the globe’s largest Bitcoin funds.
Meanwhile, the crypto market is moving ahead without any effects with the latest bankruptcy filing. The star cryptocurrency, Bitcoin has claimed a much awaited price trade of $21.5K while Ethereum has managed to surpass the $1.5K area.
Distressed institutional crypto lending and trading protocol Genesis Trading has transferred digital assets from its wallets to exchanges after filing for bankruptcy protection. Notably, Genesis Global Capital, LLC and Genesis Asia Pacific Pte. Ltd., filed voluntary petitions under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York on January 19.
However, the DCG subsidiary noted that it has filed with the court to continue with its daily operations normally despite suspending the lending business. Nonetheless, Genesis indicated that claims will be assured through the bankruptcy court process.
“Genesis has more than $150 million in cash on hand which will provide ample liquidity to support its ongoing business operations and facilitate the restructuring process. The company has filed a number of customary “first-day” motions with the court to enable day-to-day operations to continue in the normal course,” Genesis noted.
Earlier today, blockchain security firm PeckShieldAlert highlighted several transactions worth over $100 million believed to have originated from Genesis Trading towards several centralized cryptocurrency exchanges. Among the transferred digital assets include Ethereum (ETH), Tether USDT, and Circle’s USDC.
“About 75k $ETH ($113.7M) and3.9M $USDT transferred from Genesis Trading: OTC Desk to crypto-exchanges Coinbase, Bitstamp and Kraken approximately 36M $USDC transferred from Genesis Trading: OTC Desk to a new address 0x81b3…543,” PeckShield noted.
As such, the transferred digital assets from Genesis Trading to crypto exchanges are likely meant to support operations and facilitate restructuring processes.
Interestingly, the crypto market led by Bitcoin price has been less affected by the Genesis collapse. According to our latest crypto price oracles, Bitcoin is exchanging around $21k on Friday. Ethereum’s price, on the other hand, is trading around $1,555, up approximately 2.2 percent in the past 24 hours.
Gemini, world one of the largest crypto exchanges and the brainchild of the Winklevoss twins is now in deep liquidity trouble. The founders are fighting to get back the customer’s funds held on Genesis, but the recent filing of bankruptcy may make bitter things worse.
However, the founders of Gemini are pretty confident in recovering their stuck-up funds. But, the 2022 history says, the platforms which received more than 60% exposure also filed for bankruptcy in the next few days.
After Terra’s collapse, Celsius Network & 3 Arrow Capital filed for bankruptcy, while BlockFi filed after the collapse of the FTX exchange. So will Gemini move ahead and also file for bankruptcy Or do they have any backup plan?- Let’s have a glance at their reserve!
- Gemini Bitcoin, Ethereum, and stablecoin reserves have declined considerably during 2022. Bitcoin reserves have depleted from 312.6K to 135.9K while Ethereum dropped from 4.12 million to 917.9K and stablecoin reserves slashed from 626.2 million to 64.06 million.
- The ETH reserves dried up mostly due to one of Gemini’s biggest clients moving their ETH into a custody service and stablecoins dropped as Gemini moved most of its GUSD reserves into MakerDAO.
- The on-chain data of Bitcoin flows between exchanges indicated that the Gemini exchange has stopped receiving BTC from other exchanges. This suggests that traders and investors consider Gemini as a less desirable platform to hold their assets
- Besides, the Gemini spot trading volume has been falling since mid of 2021 which peaked at 3.5K just before the market collapsed in May 2021 and reached 0.6K in December 2022.
- Moreover, the BTC/USD pair was also down by more than 58% in December 2022 in annual terms.
Liquidity issues have become pretty common in the crypto space but Gemini users can still withdraw their money from the same Earn program, while it has to be noted that some large users have sued Gemini demanding their money back.
The founder, Cameron Winklevoss in a recent tweet revealed the next course of action to take legal action against DCG (parent company of Genesis) and its CEO Barry Sibert. He also assures his 320K+ Earn users to recover their stuck-up funds and the bankruptcy may make the process a little simpler.
In the past 24 hours, Bitcoin and Ethereum prices have remained relatively stable despite the bankruptcy filing of Genesis Trading under Chapter 11. According to recent data, Bitcoin is currently trading at around $20,930, an increase of 1% and Ethereum is trading at approximately $1,549, an increase of 1.5%.
The collapse of Genesis Trading has brought attention to Digital Currency Group and its subsidiary, GBTC, which holds over 600,000 Bitcoins. Genesis Trading has attributed its failure to meet loan obligations to creditors to the collapse of FTX, Alameda, and 3AC.
However, Gemini co-founder Cameron Winklevoss has accused DCG CEO Barry Silbert of engaging in unethical business practices with the subsidiary trading firm. Despite these developments, the prices of Bitcoin and Ethereum have not shown a significant negative reaction to the bankruptcy of Genesis Trading.
Interestingly, the GBTC from Grayscale has experienced a 5.82% increase today according to data from ycharts.com. Market analysts have noted that the filing of bankruptcy protection by Genesis Trading eliminates uncertainty in the market.
Additionally, rumors of possible bankruptcy protection have been circulating for the past two months, despite denials from DCG. Markus Thielen, head of strategy and research at crypto services provider Matrixport, stated,
“The market appeared to expect the Genesis bankruptcy filing for the last 48 hours as the GBTC discount suddenly widened again. With Genesis filing for bankruptcy, this removes a negative overhang from the market, and crypto investors can finally focus on fundamentals.”
However, it’s worth noting that the total crypto market volume has dropped by 31% in the last 24 hours to approximately $40.52 billion, according to data from Binance-backed Coinmarketcap. This sharp decline in trading volume could signal a possible price correction in the near future.
Given the current scenario, we would like to know your thoughts on the bankruptcy filing of Genesis Trading and its potential impact on the crypto market.
The crypto market continues to recover from the collapse of FTX, but it has been hit with yet another setback as a leading crypto lending firm, Genesis Global Capital, has filed for bankruptcy protection.
As one of the largest crypto lenders, Genesis had frozen customer redemptions on November 16, 2022, shortly after FTX filed for bankruptcy. Furthermore, on January 12, 2023, Genesis and the Gemini exchange were charged by the Securities and Exchange Commission (SEC) with illegally selling securities to investors.
Genesis Bankruptcy: Liabilities And Assets Revealed
As per reports, Genesis Global Capital has stated that it has over $150 million in cash that will be used as liquidity to support its current operations and restructuring process. The company’s bankruptcy filing claims that its liabilities and assets fall between $1 billion and $10 billion.
Additionally, Genesis Global Capital’s parent company, Genesis Global Holdco, and another lending firm, Genesis Asia Pacific, have also filed for bankruptcy.
The bankruptcy filing also lists several large creditors, including renowned crypto exchange Gemini, trading platform Cumberland, Mirana, MoonAlpha Finance, and VanEck’s New Finance Income Fund. Among these creditors, Genesis owes $766 million to Gemini, $151.5 million to Crypto-fund Mirana, $150 million to MoonAlpha Finance, $18.7 million to Cumberland, and $53 million to VanEck’s New Finance Income.
There are also two unknown creditors where Genesis owes $462.2 million and $230 million, respectively.
Market Recovers, Prices Rise
Amidst this news, the world’s largest cryptocurrency, Bitcoin, experienced a drop of nearly 0.5%. However, the market has since recovered, with Bitcoin gaining 0.62% in the last 24 hours and trading just below $21,000. Other currencies, such as Ethereum, XRP, Cardano, and other altcoins, have also seen similar recoveries.
It is important to note that the upcoming days are crucial for the crypto market as the outcome of Genesis’s further investigations will have an impact on the industry.
What is your opinion on the recent bankruptcy filing of crypto lending firm Genesis Global Capital and the potential impact it may have on the crypto industry? Do you think this could be a setback for the market or is it a necessary step for the long-term stability of the industry?
The bullish start for 2023 had set aside the turmoil that Genesis was facing since the collapse of the FTX exchange. Market participants were quite confident that the bearish influence had wanned to a large extent. However, as soon as the rounds of Genesis filing for bankruptcy hovered, the markets began to compress and traded within a very narrow range, but held within the bullish regions.
Bitcoin price which surged close to $21,000, is trading close to the crucial support at $20,800. It has been able to hold these levels withstanding the bearish pressures. The trading volume has dropped heavily by more than 20%. As the prices have been trading slightly lower, it signifies that the buyers remain slightly distinct. Regardless of the bearish action prevailing, the possibility of BTC price igniting a bull rally emerges.
During the previous day, the rounds of Genesis preparing to file for bankruptcy had slashed the price below the rising parallel channel. However, after reaching immediate support, the BTC price quickly rebounded from $20,632 and currently hovering very close to $21,000.
In case of an extended bearish action, the price may drop back toward the lower support and as the volume has depleted, the price may remain consolidated for a while. Only in case of a bullish influx, the price may rise slightly but may not surge beyond $21,000.
Conversely, if the price fails to hold the support then a wider bearish action may slash the price below $20,000 very soon. A popular analyst, TAnalyst, shares a historical Bitcoin price chart from 2015 and discovers the resembles patterns it has been following since then.
Depending on its observation, he believes that the BTC price is on its track to reach $500K. The projection is for the extremely long term beyond 2030, while the Q1 2023 forecast appears to be slightly bearish.
Crypto Market Analysis: With the Genesis Preparing for Bankruptcy, This Could be the Possible Impact on Bitcoin Price!
No sooner than the crypto space was experiencing relief, yet another turbulence struck the markets. It was speculated for quite a long time that the ripple effects of the FTX fallout may carry for a long time ahead and as Genesis is facing maximum exposure, may file for bankruptcy. However, the top lending firm is said to file for chapter 11 bankruptcy soon which is expected to have a larger impact on the Bitcoin price.
Despite the market turning extremely bullish since the past weekend, some were still bearish and believed the BTC price could find the bottoms for the 2022 bear market very soon. Moreover, with the latest pullback, some of the analysts who earlier predicted the revival of a bullish trend referring to the upswing ignited in April 2019, have changed their perspective towards the token.
A popular analyst, RookieXBT had predicted that the BTC price is at the foothill of a massive explosion. But the fresh bearish clouds hovering over the markets compelled him to flip the predictions which now mark the lows around $15,000, probably due to Genesis.
“would take another unexpected black swan tbh
Genesis probably file ch11 but i reckon it’s priced in at this point and any dips are for buying
If i’m wrong, not the first time and won’t be the last time,”
Whales Shorting Bitcoin on Binance
With the growing speculation of the bearish market trend, the traders appear to be confident about the impending BTC price fallout. Due to this, the Whales appear to be preparing to make huge profits by shorting Bitcoin. A popular analyst, Micheal van de Poppe, says that the markets may probably go more downside as the Whales are buying huge BUSD to fill the shorts on Binance.
No doubt, the short liquidations may propel the price higher, but until the stop loss is triggered, the price is believed to drop heavily towards the bottom. If the speculations are spot on, then it could the last nail in the coffin. Therefore, in this scenario, Bitcoin’s (BTC) price may slide down to form fresh bottoms for the year 2023.
According to Bloomberg reports, Genesis Global Capital, a cryptocurrency lender, may take the drastic step of filing for bankruptcy. The move comes as no surprise, as the company has been in dire straits since November 16th, when it froze customer redemptions following the collapse of major cryptocurrency exchange FTX.
Genesis Global Capital’s creditors, which include well-known cryptocurrency exchange Gemini, are said to be in negotiations with the firm over a bankruptcy plan, as reported by The Block. Under the proposed plan, creditors may agree to a forbearance period of one to two years, in exchange for cash payments and equity in Digital Currency Group, the parent company of Genesis. This plan is being considered as a possible solution to address the financial difficulties that the firm has been facing.
Since the devastating collapse and bankruptcy of crypto exchange FTX in November, Genesis Global Capital has been in a frantic race against time to secure fresh capital or reach an agreement with creditors. The company’s institutional lending unit was forced to take drastic measures, such as suspending redemptions and new originations, as a direct result of the FTX implosion.
Digital Currency Group (DCG), the parent company of Genesis, has been facing mounting pressure to fulfill its obligations of $900 million worth of locked deposits. In a bid to explore options, Genesis retained the services of investment bank Moelis & Co. last year.
In early 2022, Genesis suffered a significant setback when its $2.4 billion loan to hedge fund Three Arrows Capital went bust, following the collapse of Three Arrows due to its exposure to the Terra network, whose token and stablecoin value had drastically dropped.
The U.S. Securities and Exchange Commission (SEC) filed a lawsuit on January 12th against digital asset management group Genesis and the cryptocurrency exchange Gemini, founded by the Winklevoss twins, for alleged violation of securities laws by selling unregistered securities.
However, a surprising revelation came to light when former SEC Enforcement Chief, Lisa Braganza, alleged that the regulatory agency had prior knowledge of the situation but chose to allow it to continue. This has raised questions about the SEC’s handling of the case and their enforcement actions towards the crypto industry.
Why did the SEC fail to act?
Lisa Braganza, a former branch chief of the SEC’s enforcement division in Chicago, revealed in an interview on CNBC’s Squawk Box that the regulatory agency had been investigating Gemini’s crypto-lending product for an extended period but failed to take action.
She claims that the SEC allowed the potentially fraudulent operation to continue, even after the crypto market crash in November 2022 and Gemini’s failure to pay customers. According to her, it took “two more months” for the SEC to take action, as it was waiting for Gemini to file an answer in a separate class action case related to the company’s failure to continue payments under its proprietary Earn product.
The SEC had previously made it clear that programs like Earn are considered securities, making it baffling that they didn’t resolve the issue sooner. She said, “It’s puzzling why they didn’t come to a resolution of this a long time ago, months and months ago.”
Braganza believes that there has been a lot of finger-pointing, starting with Barry Silbert, CEO of Genesis’s parent company Digital Currency Group (DCG), and also involving the Winklevoss twins who, according to her, failed to conduct their own research and relied solely on Silbert’s assurance of Genesis’s solvency. Additionally, she states that the regulatory authorities have been aware since June 2022 that the leading cryptocurrency broker Genesis was operating in a non-solvent manner in the United States.
According to Braganza, digital asset management groups and crypto exchange companies have a responsibility to their customers when handling large sums of money, particularly their customers’ money. The SEC has not yet commented on her statements. The outcome of the legal action taken against Genesis and Gemini is yet to be determined, as the case is still in progress.
The U.S. Securities and Exchange Commission (SEC) has filed charges against Genesis Global Capital LLC and Gemini Trust Company LLC for unlawfully offering securities to a large number of investors through their cryptocurrency lending program.
Genesis and Gemini In Trouble With The SEC
According to the SEC, in December 2020, Genesis (a subsidiary of Digital Currency Group) and Gemini entered into an agreement to offer Gemini clients the opportunity to lend their cryptocurrency assets to Genesis in return for interest.
Starting in February 2021, Genesis and Gemini started providing the Gemini Earn program to individual investors, in which investors would transfer their cryptocurrency assets to Genesis, with Gemini acting as a facilitator for the transaction. Gemini deducted a fee, at times as high as 4.29 percent, from the returns Genesis paid to Gemini Earn investors.
The SEC’s complaint states that the Gemini Earn program is viewed as an offering and sale of securities under relevant laws and it should have been registered with the Commission, therefore Gemini and Genesis broke securities laws by offering and selling cryptocurrency assets through the Gemini Earn program bypassing disclosure regulations established to safeguard investors.
In November 2022, Genesis informed its investors that due to market volatility, they were facing a liquidity crunch, and as a result, investors were unable to withdraw their crypto assets. At the time, the company had around $900 million worth of assets from 340,000 Gemini Earn investors. The SEC also stated that investigations into additional potential violations are ongoing.
SEC Chairman Gary Gensler stated that these charges serve as a reminder that crypto lending platforms and other intermediaries must comply with established securities laws to protect investors and promote trust in markets, he emphasized that compliance is mandatory and not optional.
Gemini Responds To Accusations
According to a statement from Gemini Co-Founder Tyler Winklevoss, the exchange and its founders are disappointed with the SEC’s decision to file charges, as they have been working with other creditors to recover funds for users affected by the shutdown of the exchange’s “Earn” program. They claim that the SEC’s behavior is counterproductive and that the regulator never raised the prospect of an enforcement action until after the Earn program was paused on November 16th.
Gemini states that the Earn program was regulated by the New York Department of Financial Services (NYDFS) and that the company has been in discussions with the SEC about the program for more than 17 months. They also claim that the SEC chose to announce the lawsuit to the press before notifying them and that the regulator is more focused on scoring political points than helping users and creditors.
The Winklevoss brothers have stated that they will defend themselves against the SEC’s accusations, which they consider to be a “manufactured parking ticket.” They also assure that this legal battle will not distract them from their ongoing efforts to recover funds for users and other creditors.
Gemini asserts that the company has always worked hard to comply with all relevant laws and regulations and denies any suggestion of wrongdoing. They also express that they will fight back on this lawsuit and work with the SEC to resolve the issue.
Genesis did not give any immediate response to the request for a statement.
Genesis Trading, a troubled crypto lending company, has laid off 60 more employees, or 30% of its workforce, according to sources. This marks the company’s second round of layoffs, after previously cutting approximately 20% of its staff, including replacing its CEO.
The Digital Currency Group’s lending arm has been under pressure from creditors and facing potential bankruptcy. The company currently has 145 employees but may face further layoffs as it seeks new liquidity. Genesis Trading attributes its difficulties to large exposure to the troubled FTX and Alameda.
“As we continue to navigate unprecedented industry challenges, Genesis has made the difficult decision to reduce our headcount globally,” the spokesperson said in a statement. “These measures are part of our ongoing efforts to move our business forward.”
The continued layoffs may be an indicator of a looming bankruptcy case to help the company restructure its core business.
Genesis Trading Faces Imminent Bankruptcy
The crypto lending firm has a huge imbalance in its balance sheet amounting to billions. According to recent revelations by crypto exchange Gemini co-founder Cameron Winklevoss, more than $900 million belonging to over 340k Earn users is stuck with Barry Silbert and Digital Currency Group. However, Silbert vehemently denied the accusations, which further complicates the entire case.
“DCG did not borrow $1.675 billion from Genesis. DCG has never missed an interest payment to Genesis and is current on all loans outstanding; the next loan maturity is May 2023. DCG delivered to Genesis and your advisors a proposal on December 29th and has not received any response,” Silbert noted.
The nasty accusations have led to analysts warning regulators may ban cryptos from operations. Furthermore, billions of dollars belonging to individual investors have been wiped out in less than twelve months.
The open letter from Cameron has warned Silbert that Genesis and DCG have until January 8 to solve the problem amicably before facing legal action. As such, Genesis is likely to file for bankruptcy protection, which could mean more capitulation in the crypto market.
Furthermore, last year’s losses sustained from Three Arrows Capital (3AC) have now worsened by the Alameda and FTX implosion.
Genesis Trading’s other businesses, including spot and derivatives markets, have bolstered its balance sheet in the past few quarters. Nonetheless, the decreased cryptocurrency trading volume has threatened its core business of loaning fiat against digital assets.
The year 2022 witnessed many companies fall to dust as several firms filed for bankruptcy in the crypto space.
Days after FTX and Alameda collapsed, Genesis Global, which acquired $140 million from its parent company, the Digital Currency Group, decided to halt new loan sanctions and withdrawals. This was announced through a Twitter thread.
Also Genesis Global CEO, Derar Islim assured creditors over the call that the firm is looking for solutions and trying to find a new source of fresh liquidity.
Genesis & DGC Tumbles With Challenges
However, on Jan 5, Genesis laid off 30% of its employees which indicates the company’s financial instability along with doubting its sustainability in the market. This is not the first time, even in 2022 the company had laid off 20% of its 260 staff, but the fall of FTX has now worsened matters.
Now, after Genesis fired 30% of its staff, its parent company, Digital Currency Global (DCG) plans to shut down its wealth department. The company spokesperson confirmed that HQ, its wealth management division will be closed by January 31 and hopes to revisit the project in the future.
HQ was the one that managed capital for crypto entrepreneurs and investors. Even the Digital Currency Group was hit with various challenges after FTX and Alameda collapsed
On the other hand, Gemini exchange’s co-founder Cameron Winklevoss wrote an open letter to DCG chief Barry Silbert which claimed that 34,000 Gemini customers of Earn products are still waiting for their withdrawals to resume. The note also claimed that DCG owes $900 million to its Gemini customers.
However, DCG chief Silbert has maintained that the above figure is inaccurate and the DCG is absolutely in good financial condition. On the contrary, the current event of HQ closure will definitely question DCG’s stand on financial terms.
Berlin startup CryoSeed (Seed Industries) announces their flagship product, ‘CryoSeed – Genesis’, a lockable, steel, wallet recovery product, and reveals a limited-edition cypherpunk-inspired ‘Taylor Series’ collection, produced in partnership with futurist tattoo artist. Available Jan. 4th 2023.
CryoSeed unveils their flagship cold wallet backup product. CryoSeed – Genesis, the novel, lockable seed phrase recovery solution, becomes available for purchase on, January 4th 2023, the 14th anniversary of the Bitcoin – Genesis Block. Features include: innovative locking design, encoded seed phrase scheme, corrosion resistant, fireproof and more.
“We believe that CryoSeed – Genesis fills a void left by other wallet backup providers,”
– comments 26-year-old CryoSeed founder Jivala G. Touzard,
“Especially when it comes to security considerations such as the speed with which a seed phrase can be extracted and digitized”.
The patent pending ‘slide and clasp’ design allows the steel Genesis plates to be secured with any common key or combination lock (<6mm diameter bolt). The seed phrase encoding scheme translates seed words into a collection of points. These secret points are punched into the inner metal surface by the wallet owner using the included automatic punch tool to immortalize their seed phrase. In the event of a physical compromise, the lockable design and encoding scheme act as seed extraction hurdles and extend the window of opportunity to move funds to a secure wallet.
The two piece marine steel (SS 316L) Genesis design is manufactured using high precision (±0.05mm) subtractive CNC methods. After machining, components are sandblasted and passivated for a smooth and protected finish. The 316L steel used for CryoSeed – Genesis is incredibly resilient against corrosion, resists home fires and temperatures up to 1400°C (2500°F). Recoverability is essential, a CryoSeed – Genesis seed phrase remains recoverable even in the extreme event of severe deformation.
Produced in collaboration with futurist tattoo artist, CryoSeed reveals a limited-edition Genesis collection named ‘Taylor Series’, a set of timeless cypherpunk-inspired seed phrase recovery artifacts. Featuring four design themes with 27 variations each, there are a total of 108 individual CryoSeed backups in this one-time drop. Verify your backup has not been replaced with a simple glance. Secure your wallet in unique style.
With an obsession for wallet security and UX, the lean CryoSeed (Seed Industries) team based in Berlin designs and prototypes elegant tools for self custody. The CryoSeed mission is to build a premium self custody brand with product offerings that help you ensure your cold seed phrase backup can endure the arrow of time. Founded in September 2021, CryoSeed aspires to make saving cool again. www.cryoseed.xyz
Name: Jivala Touzard
Phone: +49 177 172 6692
Email: [email protected]
|Disclaimer: This is a press release post. Coinpedia does not endorse or is responsible for any content, accuracy, quality, advertising, products, or other materials on this page. Readers should do their own research before taking any actions related to the company.|
Gemini Clients have filed a Class Arbitration case against Genesis-DCG company as the company had halted withdrawals of the Gemini Earn Program when the FTX crash happened in November 2022. The reason given by Genesis was ‘unprecedented market turmoil’. Gemini assured users that it is working on the problem and will resolve it soon.
What is Class Action Arbitration?
A Class Action Arbitration is a dispute resolution between two parties made under a neutral third party that is faster and cheaper than a Class Action Lawsuit. The arbitration process is voluntary and formal and the decision of the arbitrator becomes binding and hence cannot be appealed.
What happened between Genesis & Gemini?
Genesis was the lending partner for the Gemini earn program where 7.4% interest rates were offered to users for their crypto deposits. When Genesis halted withdrawals due to financial distress, Gemini had no other option but to suspend the Gemini Earn Program which then become a bad mark on the overall reputation of Gemini. This move has affected more than 3,40,000 investors in Gemini with an aggregate amount of $900 million.
The Master Agreement between Genesis & Gemini was breached when Genesis became insolvent in 2022 but concealed this fact from them. Genesis also engaged in a fake transaction with the parent company DCG, where it exchanged the right to collect $2.3 billion debt owed to Genesis by hedge fund “Three Arrows Capital” for a promissory note of $1.1 billion due in 2033.
Genesis further broke the master agreement when it failed to return the digital assets of Gemini Earn Users. Moreover, the master agreement was also used in creating the unregistered sale of securities.
There is also a Class of Action lawsuit filed against Gemini by Gemini users for involving in the sale of unregistered securities via its Earn Program. Winklevoss, Co-founder of Gemini, accused DCG CEO Barry Silbert of engaging in ‘bad faith stall tactics’ with Gemini and said that DCG owes $900 million to Gemini & its clients.
He accused Silbert of misusing investor funds for personal gains and running behind lawyers to save his face instead of focusing on the problem and resolving it. Finally, he gave Silbert a deadline until Jan 8, 2023, to publicly commit to solving this problem, or else a legal battle is likely to follow.
There is a high chance that Gemini may force Genesis to file for Bankruptcy in case the problem is not resolved. If this happens, it will result in the liquidation of DCG assets (based on callable loans). Gemini is committed to helping its investors and is also keen on rebuilding its online reputation.
The FTX contagion continues to spread as the aftermath appears to have not settled. After the fallout of the famous exchange FTX, many platforms which had heavily invested in the firm have been facing dreadful days. Soon after the top trading firm, Genesis which shares a huge trading volume halted customer withdrawals, it was considered an alarming situation for the entire crypto space.
Currently, the debacle doesn’t appear to settle as it may further cause the final leg down for the prevailing bear market.
All of it began with the massive fallout of FTX which was triggered by Binance selling their FTT holdings as FTX was not left other than their native token in their reserve. Further, it led to a ripple of fallouts which compelled BlockFi, a well-known landing platform to file for Chapter 11 Bankruptcy. It was the same time when Genesis also halted customer withdrawals which created huge FUD within the space.
Will Genesis File for Bankruptcy?
Now all eyes are on Genesis as the speculation of its bankruptcy has been hovering within the crypto space for some time now. In a recent update, Gemini founder, Cameron Winklevoss wrote an open letter to Billy Silbert, the founder of DCG Group, the parent of Genesis and Grayscale.
Cameron accused him of negotiating in bad faith as the funds of Gemini’s Earn have been stuck with Genisis. The exchange had locked the customer’s assets funds on Genesis which was in turn invested in DCG as per some reports. Further, the funds were sent to Grayscale which continues to hold a substantial amount of assets.
Now that Genesis and DCG are going down, and not able to pay back the customer’s funds, it is now speculated that Grayscale may soon liquidate its holdings. If this happens so, a fresh bearish wave may kick in to pull a massive leg down, forming new lows of the current bear market.
What Will Happen if Grayscale is Forced to Sell Their Holdings?
Grayscale, is the top investing and asset management platform offering GBTC shares where-in the user bets on the share value rather than holding the asset. The platform has numerous trusts like Bitcoin trust, Ethereum trust, etc which have been expanded ever since the markets boomed in 2021.
However, now that the fear of Genesis filing for bankruptcy is hovering within the crypto space, other Bitcoin numerous altcoins also may face acute selling pressure.
Genesis may not have left with a huge amount to offer back to the customers and if Grayscale liquidates it’s holding a fresh bearish wave that may kick in.
Bitcoin price has been facing constant rejection at $17,000 and finely dropped heavily to hover around $16,500 in the past few days. While the possibility of a bullish close has evaporated to some extent, the upcoming days may also not offer any relief for the crypto space.
The markets have been a victim of constant negative events that compelled BTC prices to test new lows. However, before the bearish markets wind up completely, here’s when the last leg could be pulled down to mark the bottoms of the bear market.
The FTX-contagion has been spreading! Undoubtedly, the impact has not surfaced as of now but is expected to intensify very soon. The top exposed platforms of FTX collapse were BlockFi and Genesis. Now that BlockFi has filed for bankruptcy, the next could be Genesis which is speculated to file somewhere in January.
As per a popular analyst, Bob Loukas, Genesis may file bankruptcy protection in early January which may be the catalyst for the Bitcoin bear market lows.
The analyst here believes that the BTC price has completely decoupled, while the DCG & Genesis issues are yet to be resolved. Hence, before the 4-year cycle ends, the ‘cleansing’ may happen. Further, he says that the institutions are responsible for the bearish market trends which are prevailed for a long. He also suggested keeping stacking while these institutions continue to liquidate.
“I see major confluence in the Cycles. Day 50 here of a 60-day cycle. The Weekly Cycle is due a low, as of course is the 4-yr Cycle. I’m looking to add my final tranche early Jan, essentially completing buying back bitcoin with the proceeds of sales during the bull phase,”
With the foreboding signs of strain at Genesis Trading, a digital asset financial services company, Bitcoin stayed below $16,000 on Tuesday morning, just two days after crossing the threshold for the first time in two years.
FTX has triggered severe market volatility as Genesis Trading struggles to raise financing in its current situation of turmoil. According to a WSJ report, the crypto lender also solicited Binance and Apollo Global Management to bid on its loan portfolio.
What were the warning signs?
- According to the latest proceedings, FTX filed for bankruptcy on November 10, causing crashes in the crypto world.
- Gemini Earn users were alerted about withdrawal delays 5 days later.
- Genesis’ decision to halt withdrawals caused a 75% jump in the market lending rate for the Genesis Dollar (GUS), which was ascribed to a selloff and suspected shorting.
In spite of this, reliable sources claim that Binance has decided not to invest in Genesis at this time. Binance is concerned that some of Genesis’s potential commercial endeavors could lead to a conflict of interest, according to insiders.
However, Genesis had been planning to raise $1 billion in fresh cash. The crypto lender is facing a liquidity shortage due to significant withdrawals on the site. The firm blocked redemptions on November 10, saying it had $175 million locked in an FTX trading account.
What went wrong?
Early this year, the demise of Three Arrows Capital marked the beginning of Genesis’s problems (3AC). A $1.2 billion lawsuit against the hedge fund has been filed by Genesis Global’s parent firm, Digital Currency Group. Several insiders also informed IntoTheBlock that Genesis had cut its goal for fundraising by 50%, from $1 billion to now $500 million.
How will Genesis’s collapse impact the cryptocurrency market?
Genesis’ position in crypto, links to problematic enterprises, and financial reach raises contagion fears. Three Arrows Capital, a Singapore-based crypto hedge fund, and FTX-affiliated Alameda Research were Genesis’ two biggest debtors. Both are insolvent and thus, the impact will be much more intense than expected.
Is Genesis Going To File For Bankruptcy?
A Genesis spokesperson responded to the recent events by stating that the firm has no “imminent” plans for bankruptcy. According to the representative:
We won’t be declaring bankruptcy any time soon. Our aim is to reach an amicable solution to the current crisis so that no bankruptcy proceedings are necessary. Genesis’s communication with its creditors remains positive.
There’s no denying that Genesis is currently in a dire situation. In light of the recent events, the cryptocurrency exchange Gemini has temporarily suspended its Earn Program because Genesis is its Earn Program’s loan partner.
Gemini said they’re working closely with Genesis and Digital Currency Group on this issue.
“This is our top priority, and we know Genesis and DCG are exploring all possibilities to fulfill their pledges to Earn users,” the statement stated.
To sum up
There is a looming question on everyone’s mind: “What if Genesis goes under after FTX?”
Undoubtedly, this will result in massive chaos- adding to the situation of turmoil that is already prevailing and is likely to cause an even larger market correction.
The FTX-Alameda crisis has spread around other projects like Genesis Trading, Gemini and blockfi blockfi [email protected] Centralised Exchange . As a result, Genesis has halted their withdrawals while gemini gemini Crypto / Blockchain SolutionCentralised Exchange went offline and BlockFi is preparing to file bankruptcy.
Genesis Trading, a cryptocurrency market operator and financing company, has decided to cease its new loan sanctions and withdrawals.
Recently, Genesis announced that its derivatives business had nearly $175 million in locked funds in its FTX trading account. However, Genesis has stated that it currently has no relationship with FTX or alameda research alameda research Centralised Exchange .
Binance To Acquire Genesis Loan Book
Meanwhile, there are speculations that Binance CEO, changpeng zhao changpeng zhao founder and ceo at Binance Changpeng Zhao is the Founder and Chief Executive Officer at Binance.His contribution to the enhancement of Binance made the platform world’s largest cryptocurrency exchange since its inception in 2017. Zhao launched the blockchain network Binance Smart Chain which has made a remarkable contribution to the development of the decentralized finance ecosystem. Whereas in 2019, he launched Binance’s US affiliate, Binance.US.
He is commonly known as CZ, a Chinese-Canadian Business Executive who has been ranked 113th richest in the globe as of 2022. In the past, he founded Fusion Systems, a trading system for brokers famous for some of the fastest high-frequency trading systems for brokers. Zhao has served as a member of the team that developed Blockchain.info and played the role of Chief Technology Officer of OKCoin, a secure cryptocurrency exchange platform for Bitcoin, Ethereum, Dogecoin, and other crypto assets. EntrepreneurInvestorChief Executive Officer is looking forward to acquiring Genesis’ loan book. The reports claim that CZ is going through Genesis balance sheet and is seeking for more details. As per Q3 2022 report, Genesis Trading has active loans worth $2.8 billion.
One of the sources claims that this offer by Binance is most likely to be rejected by Genesis’ parent company, Digital Currency Group (DCG) and nearly $2 billion is needed to be floated.
Last week, after binance binance [email protected] Centralised Exchange announced that it is planning to acquire ftx exchange ftx exchange Centralised Exchange , the exchange was pointing towards its balance sheet which was fraudulent. And as FTX collapsed just a few days after the announcement. Now, as CZ announces plans to acquire Genesis loan book, the speculation that Genesis tumbling down grows even stronger.
In July, after three arrows capital three arrows capital Investment platform filed for bankruptcy, the firm was hit by severe liabilities of hundreds of millions of dollars, but later it was claimed that the firm had recovered . On the other hand, recently, Genesis CEO Derar Islim assured creditors over the call that the firm is looking for solutions and complete details will be revealed next week.
2022 has bought the collapse of many projects as several firms filed for bankruptcy in the crypto space.
Now, after four months, the crypto space has been hit with another bankruptcy case filing, FTX, which filed Chapter 11 of bankruptcy protection this month. The FTX collapse, in turn, has affected many other projects like Gemini, BlockFi and Genesis.
How Did 3AC’s Collapse Impact Genesis?
Meanwhile, Genesis Trading, a cryptocurrency market operator and financing company, started facing issues in June 2022 when the firm was hit by severe liabilities of hundreds of millions of dollars. These losses emerged along with the demise of Three Arrows Capital. Additionally, sources revealed that Genesis’s losses are connected to over-leveraged fund manager Three Arrows Capital and Hong Kong crypto financier Babel Finance.
Former CEO Michael Moro had remarked on behalf of Genesis, which is owned by Digital Currency Group (DCG):
“As we announced on June 17, We minimized our damages with a big competitor who could not fulfill a margin call to us.”
However, Michael Moro later claimed that they had liquidated security, covered their downward position, and recovered.
FTX Gets Contagion, Spreads Genesis
Now, days after FTX and Alameda collapsed, Genesis, which acquired $140 million from its parent company, the Digital Currency Group, has decided to halt new loan sanctions and withdrawals. This was announced through a Twitter thread.
Recently, Genesis announced that its derivatives business had nearly $175 million in locked funds in its FTX trading account. After this announcement of Genesis’s connection with FTX, many projects like Tether and Galaxy Digital claimed no relation with Genesis or its partner Gemini. However, Genesis has stated that it currently has no relationship with FTX or Alameda Research.
As per Genesis Global Capital, the firm had more than $2.8 billion in total active loans. On the other hand, Derar Islim, the present CEO, claims that Genesis Trading serves as Genesis Global Capital’s broker and operates independently.
Islim has assured creditors over the call that the firm is looking for solutions and trying to find a new source for fresh liquidity. He has assured people that the complete details will be revealed next week. As per Islim, FTX’s collapse saw too many withdrawal requests, which overpowered Genesis’ present liquidity.
After FTX it looks like Genesis Trading, a Crypto brokerage firm is being hit with insolvency issues. Tomorrow morning a call has been scheduled with creditors where Genesis is expected to reveal its connection with Alameda Research and FTX. It is also speculated that the firm will dissolve GBTC and ETHE trust to pay their creditors.
Meanwhile, Autism Capital, a proof-of-stake infrastructure provider has claimed that it’s the Grayscale who controls GBTC and ETHE trusts not Genesis. Genesis Trading has reported that currently it has $175 million in locked funds in its FTX account. Hence, Digital Currency Group (DCG) which controls Genesis and Grayscale has given $140 million in equity to Genesis.