Crypto Sector Benefits from Genesis Bankruptcy?

There has been a decision to file for bankruptcy by Genesis Global Holdco, one of the most famous crypto lenders that are now bust.

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Genesis' investors might be able to get a refund on some of the money they invested in Genesis. Currently, Bitcoin (BTC) was trading at $23,202.20 at the time of writing, according to data provided by CoinMarketCap. The fact that the Bitcoin price has been rising since the start of the year, may indicate that the crypto winter is about to come to an end.

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In the aftermath of the collapse of Three Arrow Capital, Genesis, a subsidiary of Digital Currency Group (DCG), had to deal with a number of blows. As per the legal documents filed by the failed crypto lender, nearly 100,000 people were listed as creditors, with total liabilities of between $1.2 billion and $11 billion.

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Genesis' bankruptcy filing lists an outstanding loan of $756.9 million that is due to the crypto exchange Gemini. As well as Donut, which owes $78 million, and VanEck fund, which owes $53.1 million, Trade Algo noted that the two other creditors are Donut and VanEck. 

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In the months prior to its bankruptcy filing, the cryptocurrency lender was in the news due to the fact that it was involved in "confidential negotiations" over liquidity issues, according to Trade Algo.

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It has been reported by a news website that Genesis' lawyer, Sean O'Neal, addressed the United States Bankruptcy Court of the Southern District of New York (SDNY) at the initial hearing which was held on January 23, 2022, as reported by a news website. It was said by him that the company is confident that it will resolve creditors' disputes by the end of next week and that it will be able to step out of bankruptcy proceedings within the next four months. 

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As stated in the company's press release, Gemini will be offering $100 million in cash to its Earn clients in the near future. It spiraled into a public struggle of the Gemini Earn program, which captivated crypto users with the promise of yielding 0.45% to 8% interest, which was ultimately closed by Genesis and Gemini after spiraling into a public battle. 

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It is estimated that DCG owes over $1.65 billion in debt, including $575 million in a loan that is due in May of 2023.

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Barry Silbert, who is the founder and CEO of DCG, and Cameron Winklevoss, who is the co-founder and CEO of Gemini, had a war of words on Twitter after the latter accused the former of not addressing and cooperating with the victims of Gemini's Earn program. It is clear that Genesis had a significant amount of exposure through Gemini's Earn program.