Crypto lender Genesis Global Capital is preparing to file bankruptcy as soon as this week, Bloomberg has reported, citing people familiar with the situation.
The firm, a subsidiary of Digital Currency Group, has been in negotiations with various creditor groups to remedy a liquidity crunch, according to Bloomberg.
Genesis has had a rough year, starting with crypto hedge fund Three Arrows Capital defaulting on a $2.4 billion loan from the firm in July following the Terra ecosystem collapse. Genesis filed a $1.2 billion claim against the insolvent firm later that month, which DCG assumed in entirety.
From August to October, at least a half-dozen high level Genesis executives vacated their positions.
Then, prompted by the far-reaching implosion of crypto exchange FTX in November, Genesis paused withdrawals on its now-defunct Gemini Earn, which it ran in conjunction with Winklevoss-twin-owned exchange Gemini.
Investors have yet to get their more than $900 million in assets back, and last week, the Securities and Exchange Commission charged both firms with selling unregistered securities.
Earlier this week, Genesis laid off 30% of its staff.
A separate report from The Block on Wednesday said that Genesis is discussing a prepackaged bankruptcy plan with creditors, meaning the sides would land on a restructuring agreement prior to any official filing.
The deal would then be finalized in bankruptcy court, The Block reported.
Neither Genesis nor DCG returned Banking Dive’s request for comment.
