Cryptocurrency company Genesis may officially declare bankruptcy in the coming months. The subsidiary of the Digital Currency Group has four months to resolve the bankruptcy process.
Genesis may declare bankruptcy by this date
The crypto lender aims to complete the bankruptcy process within the next four months. The company stated in its bankruptcy announcement that it is considering selling the company or converting it into equity to operate under new ownership. The solution stemming from the Chapter 11 process also affects Gemini users. The company said it is evaluating options to ensure the best possible outcome for Genesis customers and Gemini Earn users. As Kriptokoin.com, we have included the timeline of the Genesis crisis in this article. The deadline Genesis has to resolve the situation is based on Cameron Winklevoss’ statements…
CRYPTO LENDER GENESIS PLANS BANKRUPTCY EXIT BY MAY 19
— *Walter Bloomberg (@DeItaone) January 20, 2023
According to Walter Bloomberg on Twitter, Genesis is considering declaring bankruptcy by May 19. The bankruptcy date comes after Gemini co-founder Cameron Winklevoss threatened to sue Barry Silbert and the Digital Currency Group (DCG) unless a fair settlement was reached to Earn users. Winklevoss, on the other hand, acknowledged that the Genesis bankruptcy was a critical step towards recovering Gemini Earn user funds. Gemini’s co-founder stated that his firm will work to hold Silbert and DCG accountable:
In bankruptcy court, we will use every tool at our disposal to maximize recovery for Earn users and other parties within the bankruptcy court’s jurisdiction.
Genesis can use Grayscale’s products to pay off debts
In this context, time will tell whether Silbert has taken any concrete action regarding DCG’s subsidiaries such as the Grayscale Bitcoin Trust, the world’s largest Bitcoin fund. Meanwhile, despite the Genesis chapter 11 launch news, Bitcoin (BTC) and Ethereum (ETH) are reacting. On the other hand, the US Dollar Index (DXY) remains low amid growing concerns about the economic slowdown.
Cryptocurrency market remains strong despite news of bankruptcy
According to CryptoQuant analysis conducted on Jan. 19, multiple signals are determining the start of Bitcoin’s next bull run. One of the biggest observations was that BTC traders have shifted their coins from the spot to the derivatives market as it allows them to take advantage of leverage. Both BTC and ETH remain above critical supports as low volatility fades amid news of bankruptcy.
However, there is still a significant potential downside risk at the time of writing. A certain major risk has been added to the solvency of the Digital Currency Group (DCG) and Genesis, thanks to GBTC’s mismanagement. A potential mega-liquidation associated with this risk could trigger another massive sell-off, potentially eroding BTC’s latest gains.
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