Genesis, a Crypto Lending Firm, Files for Bankruptcy – The New York Times

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Genesis was caught in the fallout of the collapse of FTX, the crypto exchange founded by Sam Bankman-Fried.
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David Yaffe-Bellany reports on the cryptocurrency industry.
The cryptocurrency lender Genesis Global Holdco filed for bankruptcy late on Thursday, the latest crypto company to do so after the collapse of FTX, the exchange founded by Sam Bankman-Fried.
A year ago, Genesis and a group of other large lending firms drew millions of customers with the promise that they could deposit their crypto holdings and earn sky-high returns. But Genesis’s bankruptcy filing makes it the fourth major crypto lender to fail since last spring, when a downturn in the digital asset market sent prices plunging. Other major lenders that have gone out of business include Celsius Network and Voyager Digital, whose customers lost billions of dollars in deposits.
Genesis survived for longer, but suffered in the fallout from FTX’s implosion. In November, the company said it was freezing withdrawals, citing “market turmoil” caused by the bankruptcy of Mr. Bankman-Fried’s business.
The firm’s filing in bankruptcy court in the Southern District of New York covered three entities — Genesis Global Holdco and two of its subsidiaries, Genesis Global Capital and Genesis Asia Pacific.
Genesis is a subsidiary of the Digital Currency Group, the crypto conglomerate founded by Barry Silbert in 2015. Mr. Silbert’s management and the troubles at Genesis have recently brought him into conflict with two other prominent crypto executives, Cameron and Tyler Winklevoss, who run the exchange Gemini.
Last week, the Securities and Exchange Commission charged Genesis with offering unregistered securities in a partnership with Gemini. Gary Gensler, the S.E.C. chair, said at the time that Genesis and Gemini had bypassed “disclosure requirements designed to protect investors.”
The Winklevosses have publicly accused Genesis’s parent company, DCG, of stalling to keep funds that belong to its customers. They have also claimed that DCG and Genesis misrepresented financial information and mischaracterized the value of company assets to give the impression that Genesis was in better health than it was.
The S.E.C.’s charges against Genesis and Gemini were part of a broader crackdown on crypto lenders. Last February, the S.E.C. announced $100 million in penalties on BlockFi, a crypto lender. BlockFi filed for bankruptcy in November, making it one of the first big victims of FTX’s collapse.
Earlier on Thursday, the S.E.C. announced a $45 million settlement with another crypto lending firm, Nexo, for violating securities law.


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