Crypto Markets Surge But Genesis Has Over $5B in Liabilities

Bullet Points:
• Crypto lending firm Genesis had $5.1 billion in liabilities following its withdrawal freeze in November.
• Interim CEO Derar Islim provided a breakdown of the firm’s financial state heading into its restructuring.
• Three of Genesis‘ entities filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York.

Crypto Markets Today: Bitcoin Surges Above $22K, Genesis Has Over $5B in Liabilities

On Monday, the crypto markets responded positively to the news that Bitcoin had surged to a new all-time high of $22,300. Ether was also trading up, by 5% to $1,640. Equities also closed up on the news. However, this surge in the crypto markets was accompanied by a less positive story about crypto lending firm Genesis.

Interim CEO Derar Islim recently provided a breakdown of Genesis‘ financial state heading into its restructuring. The breakdown was included in a first-day motion in the U.S. Bankruptcy Court for the Southern District of New York, and revealed that the firm had a staggering $5.1 billion in liabilities following its withdrawal freeze in November. This freeze was a result of the „run on the bank“ that was sparked by the collapse of FTX and sister company Alameda. Customers demanded Genesis repay $827 million in loans, forcing its lending units to freeze withdrawals in order to protect remaining funds.

As a result of this financial situation, three of Genesis‘ entities had to file for Chapter 11 bankruptcy protection. These entities were Genesis HoldCo, Genesis Global Capital LLC and Genesis Asia Pacific PTE. LTD. In the motion, Islim asked the court to grant the firm access to $50 million of its funds, in order to help it operate during the restructuring process.

In the coming weeks, it will be interesting to see how the situation develops for Genesis. The firm’s financial situation is far from ideal, but it is still trying to make the best of the situation and restructuring its operations. If successful, Genesis could emerge from this crisis stronger than before. It’s clear that the crypto markets still have plenty of room to grow, and Genesis‘ situation is a reminder that the industry is still relatively young and has a lot of room for improvement.