The continued downfall of the crypto industry showed no signs of abating today after one of its largest lenders collapsed.
It had assets and liabilities in the range of $1 billion and $10 billion, according to documents filed with the Southern District of New York, with at least $2.8 billion of active loans, according to the company’s website, sending shockwaves through the industry and raising concerns over the health of other industry players exposed to the company.
Interim CEO Derar Islim said in a statement: “While we have made significant progress refining our business plans to remedy liquidity issues caused by the recent extraordinary challenges in our industry…an in-court restructuring presents the most effective avenue through which to preserve assets and create the best possible outcome for all Genesis stakeholders.”
The firm forms part of the empire of billionaire Barry Silbert known as the Digital Currency Group, or DCG, which also operates asset manager Grayscale, that controls billions of dollars worth of crypto assets, as well as crypto news site CoinDesk.
Silbert is worth $3.2 billion (£2.6 billion) according to an estimate by Forbes.
Genesis said it has $150 million in cash on hand to support its ongoing business operations and facilitate the restructuring process.
The firm added that its derivatives, spot trading, broker dealer and custody businesses were not part of the bankruptcy process, and would continue their client trading operations.
Genesis had been under pressure since last year, following the collapse of crypto investment business Three Arrows Capital, causing it to default on a $665 million loan.
The move is likely to add to the thousands of layoffs in the crypto industry that have already taken place since the start of the year.