US cryptocurrency lending firm Genesis Global Capital is reportedly preparing to file for bankruptcy as early as this week. The company has suspended withdrawals since November 2022. The news was reported by blockchain and cryptocurrency news site, The Block, which cites a source stating that Genesis is negotiating a bankruptcy plan with its creditors. The plan may involve creditors agreeing to defer most debt payments for a period of between one and two years, with creditors receiving cash payments and shares in Digital Currency Group (DCG), the parent company of Genesis.
Investors are concerned that the bankruptcy of Genesis could also have a negative impact on DCG, which owns Grayscale, a digital asset management firm, and CoinDesk, a cryptocurrency media site, among other assets.
Creditors of Genesis include Gemini’s Earn, which lends cryptocurrency through Genesis to earn interest and now has no access to capital totaling more than $900 million.