Genesis froze withdrawals in Nov 2022 and laid off 30% of its employees in January this year.
Digital Currency Group owned Genesis became the first firm to file for bankruptcy in 2023. The stressed crypto lending protocol will join the list of crypto platforms that went bankrupt last year in the ice-cold bear market.
Celsius Network, Voyager Digital, BlockFi and Three Arrow Capital were the shining stars in the bull market but due to mindless spending, all of them filed for chapter 11 bankruptcy last year. The final blow came in the form of FTX collapse.
On November 11, 2022, FTX exchange filed for bankruptcy. The reports revealed that the company has mismanaged user deposits and was charged with financial misconduct. The customers lost combined assets worth $10 billion.
Although the investigation is in process, the collapse caused a Domino effect on every other crypto platform. Many users were seen withdrawing funds from the exchanges and protocols leading to the drying of capital from the market.
Genesis took a blow and noticed decline in the liquidity. It froze customer withdrawals and initiated talks with its creditors but failed to reach an agreement. Moreover, it’s been accused by Gemini for not returning $900 million that Gemini lent to Genesis for yield generation.
The pain hasn’t stopped there. Genesis has been charged by U.S. Securities and Exchange Commission for illegally selling securities to investors through their crypto lending program.
Genesis filed for bankruptcy to safeguard itself from creditors but now its long-term survival is in question. The parent company Digital Currency Group also own CoinDesk and GrayScale Investments.
The Latest Crypto Headlines:
- List of Apple crypto wallets for iOS: iPhone and iPad
- Alchemy Pay Crypto ACH jumped 50% outperforming market expectations
- US Department of Justice charged $700 million to less known Bitzlato crypto exchange
Paras is a blockchain writer & video creator at Katoch Tubes. In his free time, he loves watching space exploration documentaries & Hollywood movies.