The crypto market has been making some recovery recently. However, it seems that the danger is not entirely over. At present, the market is mostly trying to recover from the cascading impact of the FTX collapse.
During this time, crypto investors have been keeping an eye out for any more bad news or downfall that could affect their portfolios.
There have been some suspicious projects, such as Solana and others, that have been rumored to meet their makers. However, the DeFi project that has taken the next fall is none other than Genesis. It is important to note for context that Genesis is a lending project associated with Digital Currency Group.
Genesis Management Issues Warning Regarding Bankruptcy
It has been two months since Genesis officially halted the funds of its account holders. In this manner, Genesis has been on the radar of the people to become the next crypto giant to bite the dust.
To address the matter, the management of Genesis has been holding meetings with the creditors. A Bloomberg report shed light on this matter, exclaiming that the project has been struggling since the collapse of FTX.
The lending platform has reported that it has locked funds valued at $175 million. However, the firm reported to investors that it might have to go for a bankruptcy filing if it is unable to collect enough funds.
Some resources have revealed that Genesis management has been trying to avoid bankruptcy for a while. Meanwhile, its parent company DCG has been in a scuffle with the Gemini exchange for freezing $900 million in funding.
The payable funds claimed by Gemini exchange are related to the product issued by Genesis. However, DCG CEO Barry Silbert has claimed that DCG has withheld $447.5 from Genesis.
Furthermore, he has claimed that Genesis is liable to get paid a promissory note worth $1.1 billion that is set to mature in 2032.
Meanwhile, DCG has also informed its shareholders about halting the dividend payments to manage operating expenses and maintain liquidity.
Financial Times has reported that DCG reporters are invested in 200 million positions hailing from 35 countries and have an AUM of $500 million. Another business under DCG is CoinDesk which is considering a partial or complete sale.