Genesis is a digital assets focused financial services firm for institutional investors. It is a subsidiary of Digital Currency Group (DCG). Genesis operates several businesses, including Genesis Global Trading, Inc. (“GGT”), Genesis Global Capital, LLC (“GGC”), Genesis Asia Pacific Pte. Ltd. (“GAP”), GGC International Limited (“GGCI”), and Genesis Custody Limited (“Genesis Custody”). Genesis Trading provides over-the-counter (OTC) trading services for large-volume digital assets transactions. Genesis' lending business offers institutional lending services to clients who want to borrow or lend digital assets. Genesis filed for

Chapter 11 bankruptcy Chapter 11 of the United States Bankruptcy Code (Title 11 of the United States Code) permits reorganization under the bankruptcy laws of the United States. Such reorganization, known as Chapter 11 bankruptcy, is available to every business, whe ...

on January 19, 2023 to request court protection to reorganize its digital assets lending and borrowing business.

History

Genesis Global Trading, Inc. was founded in 2013. It is a subsidiary of the Digital Currency Group, a venture capital company founded by

Barry Silbert Digital Currency Group (DCG) is a venture capital company focusing on the digital currency market. It is located in Stamford, Connecticut. The company has five subsidiaries which are ''CoinDesk'', Foundry, Genesis, Grayscale Investments, and L ...

. Genesis' business consists of entities that provide trading, lending, and custody digital assets, targeting institutional clients and

high-net-worth individual High-net-worth individual (HNWI) is a term used by some segments of the financial services industry to designate persons whose investible wealth (assets such as stocks and bonds) exceeds a given amount. Typically, these individuals are defined ...

s. They claim to have been the first OTC Bitcoin trading desk, launched in 2013. Genesis acquired the London-based crypto asset custodian company Volt in early 2020. Grayscale Investments' crypto assets were held by

Xapo Xapo is an international, private bank headquartered in Gibraltar and licensed by the Gibraltar Financial Services Commission. The company originally provided a bitcoin wallet combined with a cold storage vault and a bitcoin-based debit card ...

, which

Coinbase Coinbase Global, Inc., branded Coinbase, is an American publicly traded company that operates a cryptocurrency exchange platform. Coinbase is a distributed company; all employees operate via remote work and the company lacks a physical headquar ...

bought in 2019. After the Volt acquisition, Genesis moved its crypto custody from Coinbase to Grayscale. In early July 2022, Genesis' parent company Digital Currency Group (DCG) took on some of Genesis' debts to keep the company afloat after it was left exposed to losses from loans made to Singapore-based crypto lender Babel Finance and the bankrupt crypto hedge fund,

Three Arrows Capital Three Arrows Capital (also known as 3AC or TAC) was a Singapore-based cryptocurrency hedge fund which was ordered to liquidate on 27 June 2022 by a court in the British Virgin Islands. It was founded in 2012 by Kyle Davies and Su Zhu. The compan ...

(3AC). Former CEO Michael Moro stepped down from his post on August 17, 2022. Genesis COO Derar Islim assumed the role of Interim CEO. In November 2022, the company revealed that it had $2.8 billion in outstanding loans. The company hired investment bank Moelis & Company to assist in restructuring. The options the company was considering at the time included declaring bankruptcy. In the same month, '' Barron's'' reported that Genesis was under investigation by state securities regulators. On January 12, 2023, the

Securities and Exchange Commission The U.S. Securities and Exchange Commission (SEC) is an independent agency of the United States federal government, created in the aftermath of the Wall Street Crash of 1929. The primary purpose of the SEC is to enforce the law against market ...

charged Genesis Global Capital, LLC with the unregistered offer and sale of securities to retail investors through Gemini Trust Company’s Gemini Earn crypto asset lending program. The SEC is seeking permanent injunctive relief, disgorgement of ill-gotten gains plus prejudgment interest, and civil penalties against both Gemini and Genesis. On January 19, 2023, Genesis Global Holdco, LLC and two of its lending business subsidiaries, Genesis Global Capital, LLC and Genesis Asia Pacific Pte. Ltd., filed voluntarily petitions under Chapter 11 of the U.S. Bankruptcy Code in the Southern District of New York. Genesis listed over 100,000 creditors with aggregate liabilities in the range of US$1.2–11 billion dollars. The company stated that its derivatives and spot trading business were not a part of the bankruptcy filing and continue operating. On February 6, 2023, Genesis Global Holdco announced an agreement in principle with DCG and creditors of Genesis Global Capital. The agreement was files with the court on February 10, 2023 describes that DCG will give its equity interest in Genesis Global Trading, Inc. (GGT) to Genesis Global Holdco, LLC.. DCG will also refinance its loans from Genesis and exchange its existing $1.1 billion promissory note for convertible preferred stock issued by DCG.

References

{{Cryptocurrency American companies established in 2013 Companies that filed for Chapter 11 bankruptcy in 2023 Cryptocurrency companies