Bitcoin could be rocked again this week with a potential bankruptcy from Genesis

In the wake of FTX, the Genesis giant may file for bankruptcy this week. This would shock the bitcoin exchange rate, which has been experiencing a period of calm in recent days.

Despite the relative calm in the crypto market, with bitcoin over $20,000, the ecosystem is holding its breath. Indeed, a great actor would number his days. Crypto lending platform Genesis, weakened by FTX crash, could go bankrupt this week, reveals Bloomberg and other specialized media. However, such an event could once again weaken the cryptocurrency market, said Vincent Boy, technical analyst at IG, during a press conference. Indeed, in addition to delivering another blow to the crypto ecosystem, the bankruptcy of this new giant could lead to unrest in other players, in particular the cryptogiant Gemini or, as a result, the specialized media. CoinDesk.

The situation has worsened for several months for Genesis, first weakened by the collapse of the Terra Luna ecosystem. After laying off 20% of its staff in August, Genesis parted ways with 30% of its staff in early January, down to just 145 employees. The real blow came last November’s bankruptcy of FTX, a strategic player for Genesis, after the company had blocked $175 million from the American giant.

Due to the lack of liquidity, Genesis notified its customers on November 16 that they could no longer withdraw their cryptocurrencies from the platform. What was supposed to be “temporary” never returned to normal, internally weakening Genesis and some of its partners and creditors. With no solution found so far, Genesis this week set up a “default bankruptcy plan” with its major creditors. The latter would agree to a “forbearance period, for most payments, of one to two years under the default bankruptcy plan,” the sources specify bloc and to Bloomberg. In return, they will be able to receive cash payments and shares in Genesis’ parent company, Digital Currency Group (DGC).

The tensions between Gemini and Genesis

Among the creditors, there are above all the Winklevoss brothers, founders of the Gemini crypto exchange platform, which still manages almost A cryptocurrency worth $30 billion. However, the tension has gone up a notch between Gemini and Genesis. Indeed, since 2020, the two companies have been partners in the “Gemini Earn” program, which allowed Gemini customers to earn up to 8% interest by lending their cryptocurrencies to Genesis. However, on November 16, Genesis suspended lenders’ ability to withdraw their cryptocurrencies. Today, Genesis holds $900 million from Gemini’s 340,000 lenders. Funds claiming Gemini today.

Asking Genesis for this $900 million in a letter posted on Twitter in early January, Cameron Winklevoss caught the eye of the US stock market watchdog, the SEC. Result: The SEC decided to prosecute the two companies, considering that the “Gemini Earn” program should have been registered with the competent bodies, to protect investors.

Things don’t stop there for Genesis. According to a letter addressed to shareholders dated Monday and seen by Bloomberg, DGC announced that it was “suspending its quarterly dividends to conserve cash.” A decision that puts the specialized media in difficulty CoinDesk, known for first revealing the close ties between Alameda Research and FTX. Indeed, Genesis’ parent company, DGC, had bought out CoinDesk in 2015 for about $600,000. As of today, the media outlet, which has hired the Lazard firm as a financial adviser, is exploring a “total or partial sale”, its chief executive Kevin Worth told AFP. Block.

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