David - Cryptocurrency Enthusiast
Crypto lender Genesis Global has filed for Chapter 11 bankruptcy protection in the Southern District of New York, becoming the latest firm to be impacted by the collapse of FTX. The firm has estimated liabilities of $1 billion to $10 billion and assets in the same range, according to a Jan. 19 filing. This is a significant development in the crypto industry and serves as a reminder of the potential risks associated with cryptocurrency investment.
As a crypto lender, Genesis offered a range of products and services to its clients, including crypto asset management, Bitcoin investing. However, the company has been struggling with liquidity issues and had been considering filing for bankruptcy protection if it was unable to raise capital. In a Jan. 19 press release, Genesis stated that it had been engaged in discussions with its advisors, creditors, and corporate parent Digital Currency Group (DCG) to evaluate the most effective path to preserve assets and move the business forward.
Genesis's broker-dealer, custody, spot trading, and derivatives businesses are not involved in the Chapter 11 proceedings and will keep operating, according to the company. Additionally, it stated that it believed it had more than $150 million in the bank.
In November 2022, the company halted withdrawals from its platform due to market turmoil brought on by the demise of FTX, which influenced customers of Gemini Earn, a yield-bearing service for customers of the Genesis-managed Gemini cryptocurrency exchange.
In the past, there have been other similar cases, like QuadrigaCX, a Canadian crypto exchange that filed for bankruptcy in 2019 after the death of its founder, who was the only one who had access to private keys of the exchange cold wallets. This highlights the importance of choosing a reputable cryptocurrency exchange.
The crypto market is a dynamic and rapidly growing industry, with many options for buying and selling Bitcoin. However, it's important for investors to be aware of the risks and to do their due diligence when choosing a platform for crypto market investment. It's crucial to invest only what you can afford to lose and to diversify your investment portfolio.
Despite the recent developments, the future looks bright for the crypto market. With more and more countries announcing their plans to regulate the crypto industry, it's clear that cryptocurrencies are here to stay. With the right approach, investors can still profit from buying and selling digital currencies. Investing in cryptocurrency can be a great way to diversify your investment portfolio, but it's essential to do your research and choose a reputable platform to trade on.