Investing.com – In what is yet another fallout from FTX’s bankruptcy, the Genesis crypto lender filed for Chapter 11 bankruptcy protection late Thursday.
The company listed more than 100,000 creditors in its “mega” bankruptcy filing, with overall debts ranging from $1.2 billion to $11 billion, according to the documents.
In a statement, the group clarified that the bankruptcy only affected its companies involved in Genesis’ cryptocurrency lending business. Trading activities remain open, as does Genesis Global Trading.
“We look forward to advancing our dialogue with DCG and our creditors’ advisors as we seek to implement a pathway to maximize value and provide the best opportunity for our business to emerge well positioned for the future.” said Derar Islim, interim CEO of Genesis, in a statement.
Recall that the collapse of FTX in November sent shock waves through the cryptocurrency market and led to a rush of withdrawals. The Wall Street Journal reported that, following the collapse of FTX, Genesis sought a billion-dollar emergency bailout, but found no interested parties.
Specifically, Genesis’ problems stem from the company’s lending to crypto hedge funds and OTC firms, including Three Arrows Capital (3AC) and Alameda Research, the hedge fund launched by Sam Bankman. -Fried and closely related to FTX.
3AC filed for bankruptcy in July, after being heavily impacted by the collapse of stablecoin USD and its sister crypto LUNA. Genesis had loaned assets worth more than $2.3 billion to 3AC, according to court documents.
Regarding Alameda, Genesis had an exposure of $2.5 billion, although this position was liquidated in August. After FTX went bankrupt in November, Genesis said approximately $175 million in Genesis assets were “locked” to FTX’s platform.