Allegedly, Bitcoin platform Genesis Global Capital is exploring options, including a potential bankruptcy. He hired investment bank Moelis & Company to discuss these options. According to the claims of The New York Times, no final decision was made in the report. It is also thought that it is possible to avoid filing for bankruptcy. Meanwhile, the CEO of Digital Currency Group (DCG), behind Genesis, made various statements and stated that the situation is good. Here are the details…
Latest claims for Bitcoin platform Genesis: DCG CEO spoke
As we reported on cryptokoin.com, Genesis had spent most of November struggling to raise new capital or reach a settlement with creditors, thanks to its exposure to the crashing crypto exchange FTX. The company’s corporate lending unit was forced to suspend redemptions and new loans last week. Genesis also previously revealed that the derivatives unit has approximately $175 million in locked funds in its FTX trading account. As a result, parent company Digital Currency Group (DCG) has chosen to bolster Genesis’ balance sheet with an equity flow of $140 million.
A few months ago, Genesis reportedly suffered hundreds of millions of dollars in losses due to loans to failing crypto hedge fund Three Arrows Capital. Separately Tuesday, DCG founder and CEO Barry Silbert announced in a note to shareholders that DCG owes approximately $575 million to Genesis Global Capital, which is due in May 2023. “There has been a recent discussion between Genesis Global Capital and DCG about intercompany loans,” Silbert wrote. Silbert used the following statements:
For those unaware, in its usual course of business, DCG has borrowed from Genesis Global Capital in the same way as hundreds of crypto investment firms. These loans have always been structured at arm’s length and priced at prevailing market interest rates. DCG currently owes Genesis Global Capital $575 million due in May 2023. These loans were used to finance investment opportunities and repurchase DCG shares from shareholders previously highlighted in quarterly shareholder updates.
DCG on track to generate revenue this year
Silbert also reminded investors of a $1.1 billion bond due in June 2032. He pointed out that this was related to Genesis’ liabilities related to the Three Arrows Capital default. “Apart from Genesis Global Capital intercompany loans and long-term securities due in May 2023, DCG’s only debt is a $350 million loan facility from a small group of lenders led by Eldridge,” Silbert said.
He noted that DCG has raised only $25 million in equity. He added that he is on track to generate $800 million in revenue this year. Also, Silbert pointed out that DCG has survived previous cryptocurrency winters. He stated that although the current winter will feel harsher, they will come out of it stronger. “There has been a lot of fuss over the past week,” Silbert said at the beginning of his statements, for the bankruptcy claims.
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