In the wake of FTX, the giant Genesis could declare bankruptcy this week.
This would rock the price of bitcoin, which was experiencing a lull in recent days.
Despite the relative lull in the crypto market, with bitcoin above $20,000, the ecosystem is holding its breath. Indeed, one big player is reportedly counting its days.
The crypto lending platform Genesis, weakened by the fall of FTX, could go bankrupt this week, reveals Bloomberg and other specialized media.
Such an event could again weaken the crypto market, said Vincent Boy, technical analyst at IG, during a press briefing.
Indeed, in addition to dealing another blow to the crypto ecosystem, the bankruptcy of this new giant could lead to upheavals in other players, including the crypto giant Gemini or, by ricochet, the specialized media CoinDesk.
The situation has been deteriorating for several months already for Genesis, first weakened by the collapse of the Terra Luna ecosystem.
After laying off 20% of its staff in August, Genesis separated from 30% of its staff in early January, leaving only 145 employees. The real blow was caused by the bankruptcy last November of FTX, a player that was strategic for Genesis, since the company had locked up $175 million with the American giant.
Tensions between Gemini and Genesis
Among the creditors are mostly the Winklevoss brothers, founders of the crypto exchange platform Gemini, which still manages nearly $30 billion in cryptocurrencies. Now, tensions have risen between Gemini and Genesis. Indeed, since 2020, the two companies were partners in the “Gemini Earn” program, which allowed Gemini customers to earn up to 8% interest by lending their crypto-currencies to Genesis. However, on November 16, Genesis suspended the ability for lenders to withdraw their cryptocurrencies. Today, Genesis holds $900 million from 340,000 Gemini lenders.
Funds that Gemini is now demanding.
By asking Genesis for these $900 million in a letter posted on Twitter in early January, Cameron Winklevoss caught the eye of the U.S. securities regulator, the SEC. As a result, the SEC decided to sue both companies, considering that the “Gemini Earn” program should have been registered with the competent authorities, in order to protect investors.
Among the creditors are mostly the Winklevoss brothers, founders of the crypto exchange platform Gemini, which still manages nearly $30 billion in cryptocurrencies. Now, tensions have risen between Gemini and Genesis. Indeed, since 2020, the two companies were partners in the “Gemini Earn” program, which allowed Gemini customers to earn up to 8% interest by lending their crypto-currencies to Genesis. However, on November 16, Genesis suspended the ability for lenders to withdraw their cryptocurrencies. Today, Genesis holds $900 million from 340,000 Gemini lenders. Funds that Gemini is now demanding.By asking Genesis for these $900 million in a letter posted on Twitter in early January, Cameron Winklevoss caught the eye of the U.S. securities regulator, the SEC. As a result, the SEC decided to sue both companies, considering that the “Gemini Earn” program should have been registered with the competent authorities, in order to protect investors.
Things don’t stop there for Genesis. According to a letter to shareholders dated Monday and seen by Bloomberg, DGC announced that it was “suspending its quarterly dividends to conserve cash.” A decision that puts in trouble the specialized media CoinDesk, known for having revealed first the close links between Alameda Research and FTX. Indeed, the parent company of Genesis, DGC, had acquired CoinDesk in 2015 for about 600,000 dollars. As of now, the media company, which hired the Lazard law firm as financial advisor, is exploring a “full or partial sale,” its boss Kevin Worth told The Block.