Crypto Lender Genesis on the Brink

Genesis Global Capital, the lending unit of Digital Currency Group (DCG), is reportedly teetering on the edge of bankruptcy.

According to a Bloomberg report, which cited people familiar with the matter, the troubled lender is planning to file for bankruptcy as soon as this week, as the company and its creditors have yet to come to an agreement.

Genesis halted withdrawals in November, citing heavy exposure to 3AC and FTX. Last week, it laid off almost a third of its workforce, which now stands at 145 employees.

The firm has also been embroiled in a dispute with crypto exchange Gemini. It owes users of the Gemini Earn program some US$900 million, something that Cameron Winklevoss, co-founder of Gemini, has been eager to remind the public.

Earlier this month, Winklevoss wrote an open letter earlier this week to Barry Silbert, chief executive of DCG, Genesis's parent company, accusing him of “bad faith stalling tactics,” claiming that DCG owes Gemini a total of US$1.675 billion. Winklevoss has also publicly demanded the removal of Silbert from his position as DCG CEO.

Yesterday, DCG announced that the company would be suspending dividends until further notice, citing the need to preserve liquidity.

Coindesk to leave DCG

Meanwhile, crypto news outlet Coindesk, which is also owned by DCG, has engaged investment bank Lazard to explore a potential sale, which would see it removed from the DCG group. The publication was the first to break the story about FTX's financial troubles, which ultimately sparked a bank run on the exchange.

According to a report by the Wall Street Journal, which cited people familiar with the situation, DCG has received unsolicited offers upwards of US$200 million for Coindesk. The group acquired the publication back in 2016 for US$500,000, and saw US$50 million in revenue last year generated from online advertising as well as its index and events business.