Crisis at DCG: Genesis Could File for Bankruptcy This Week, as CoinDesk Explores Sale
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Crisis at DCG: Genesis Could File for Bankruptcy This Week, as CoinDesk Explores Sale

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Created 1yr ago, last updated 10mo ago

Not only was Genesis badly burned by the demise of Three Arrows Capital, but it has now been frozen out of $175 million after FTX collapsed too.

Crisis at DCG: Genesis Could File for Bankruptcy This Week, as CoinDesk Explores Sale

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Genesis could be on the brink of filing for bankruptcy as early as this week, according to Bloomberg.

The crypto lender, which is ultimately owned by Digital Currency Group, has been left in a perilous financial position after suffering exposure to a number of earlier bankruptcies.

Not only was Genesis badly burned by the demise of Three Arrows Capital, but it has now been frozen out of $175 million after FTX collapsed too.

It now owes $900 million to 340,000 Gemini Earn customers, with little sign of an agreement being reached.

Withdrawals have been suspended at Genesis since November — a move that often serves as an early warning sign that bankruptcy proceedings are imminent.

Reports from multiple outlets suggest that negotiations about a Chapter 11 filing are ongoing — and this could see creditors submit to a forbearance period of up to two years.

If confirmed, this would be the first major bankruptcy of a crypto firm in 2023 — and show that contagion is still spreading through the sector, even despite Bitcoin's recent rally.

CoinDesk Up for Sale?

In other developments, reports from The Wall Street Journal suggest that other parts of Digital Currency Group could be up for sale.

CoinDesk — the news outlet that played an instrumental role in exposing Sam Bankman-Fried — has apparently lined up investment bankers to explore options.

The website, which generated $50 million in revenue last year, has also been aggressively covering developments at its parent company, creating headaches for Barry Silbert.

According to the WSJ, CoinDesk CEO Kevin Worth confirmed he has "received numerous inbound indications of interest" in the business — with several offers above $200 million.

This would be quite a return on investment for DCG, which had initially snapped up the media company for a mere $500,000 in 2016 — before Bitcoin dramatically surged to $20,000 and burst into public consciousness.

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