Please try another search
© Reuters
By Geoffrey Smith
Investing.com -- Barry Silbert is offering a stake in his digital currency empire to the creditors of its stricken lending unit Genesis, according to a report in The Block.
Genesis, which suspended client withdrawals in November after the collapse of crypto exchange FTX, is preparing to file for chapter 11 bankruptcy as early as this week, according to Bloomberg. That would confirm what has been increasingly apparent over recent weeks - that Genesis' catastrophic losses during the 2022 crypto meltdown had rendered it insolvent.
Under a resolution package proposed by Silbert, its creditors would receive cash payments and equity in Silbert's Digital Currencies Group after a grace period lasting up to two years, The Block reported.
It's unclear whether that would be enough to satisfy Genesis' highest profile creditors, crypto pioneers Cameron and Tyler Winklevoss. The twin owners of investment platform Gemini have loudly complained in recent weeks that the 340,000 customers of its own lending program Earn are owed $900 million by Genesis. Gemini itself may be on the hook to make those customers whole if it can't disgorge the money from Genesis.
According to an open letter published last week by Cameron Winklevoss, Genesis had lost around half of the $2.4B it lent to hedge fund 3 Arrows Capital when the latter collapsed last spring, a victim of the Terra/Luna stablecoin implosion. According to Winklevoss, 3AC had been recycling much of that money into DCG's Grayscale Bitcoin Trust, one of only very few registered ETFs giving investors indirect access to Bitcoin. That ETF's value tumbled last year as Bitcoin lost over two-thirds of its value, while its discount to the net asset value of its holdings widened sharply, an indication of skepticism about the quality of the trust's asset backing.
Are you sure you want to block %USER_NAME%?
By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.
%USER_NAME% was successfully added to your Block List
Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.
I feel that this comment is:
Thank You!
Your report has been sent to our moderators for review
Add a Comment
We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
Enrich the conversation, don’t trash it.
Stay focused and on track. Only post material that’s relevant to the topic being discussed.
Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.