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Crypto Update: Crypto lender Genesis plans to file for bankruptcy as early as this week: report

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Crypto lender Genesis Global Capital is reportedly preparing to file for bankruptcy as early as this week, according to a Bloomberg article on Wednesday, after the company paused withdrawals since November. 

The company has been negotiating a prepackaged bankruptcy plan with its creditors, according to The Block citing anonymous sources. Such creditors may agree to a forbearance period of between one and two years for most of the payments, The Block reported. Creditors will in exchange, receive cash payments and equity in Genesis’s parent company Digital Currency Group, or DCG.

Investors have feared that Genesis’s bankruptcy may drag down DCG, which also owns digital asset manager Grayscale and crypto media site CoinDesk, among others.

Representatives at Genesis didn’t immediately respond to a request seeking comment for this article. Representatives at DCG declined to comment. 

Genesis’s creditors include some users of crypto exchange Gemini’s Earn program. Such users lent out their crypto through Genesis to earn interests, and have been unable to access a total of more than $900 million in funds, according to several media reports.

Bitcoin
BTCUSD,
-2.14%

fell 1.9% over the past 24 hours to around $20,923 Wednesday, according to CoinDesk data.

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