The Next Bankruptcy Domino May Be Genesis

The crypto lender reportedly warned investors about filing for bankruptcy if it couldn’t line up sufficient financing

article-image

Source: Shutterstock / CryptoFX, modified by Blockworks

share

Some two months after halting customer withdrawals, Genesis has become the next crypto market player to head for bankruptcy.

The firm held private discussions with different creditor groups, Bloomberg reported on Thursday. The lending unit has been reeling from the collapse of FTX, where it had $175 million in locked funds, and had warned potential investors about bankruptcy if it couldn’t raise fresh capital.

Genesis was “trying at all costs to avoid [bankruptcy],” a source previously told Blockworks, an effort they described as “admirable, but costly.” 

Digital Currency Group, the parent company of Genesis, was recently accused by Gemini of making false representations about Genesis’ solvency. Gemini co-founder Cameron Winklevoss called on DCG’s board to oust its CEO Barry Silbert, saying he had defrauded Gemini and its users were unable to access $900 million locked in a product tied to Genesis.

However, Silbert contradicted this claim and said DCG owed Genesis $447.5 million, on top of bitcoin worth $78 million maturing in May this year. Additionally, Genesis is owed another $1.1 billion promissory note that matures in 2032, he said.

He also claimed that DCG had not borrowed funds from Genesis since May 2022, and is up-to-date on loans outstanding.

Still, DCG reportedly informed shareholders this week that it would suspend dividends to reduce operating expenses and preserve liquidity. 

DCG is one of the most active investors in the crypto industry, with some 200 million investments in 35 countries worth about $500 million, according to the Financial Times.

It primarily runs five businesses — media firm CoinDesk, Genesis, digital asset manager Grayscale, Foundry and digital asset exchange Luno. CoinDesk is reportedly weighing a partial or full sale. 

Genesis and DCG didn’t return Blockworks’ request for comment by press time. 

The Securities and Exchange Commission recently charged Genesis and Gemini for allegedly offering unregistered securities to retail investors through the Earn product.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Brooklyn, NY

SUN - MON, JUN. 22 - 23, 2025

Blockworks and Cracked Labs are teaming up for the third installment of the Permissionless Hackathon, happening June 22–23, 2025 in Brooklyn, NY. This is a 36-hour IRL builder sprint where developers, designers, and creatives ship real projects solving real problems across […]

recent research

Featured.png

Research

Helium stands at a pivotal moment in its evolution as a decentralized wireless network, balancing rapid growth, economic restructuring, and global expansion. With accelerated growth in domestic DAUs and Hotspots supporting its network, Helium is leveraging strategic partnerships and innovative proposals to scale internationally. The recent implementation of HIP 138, “Return to HNT,” has unified its token economy under HNT, simplifying participation and strengthening liquidity, while HIP 139’s phase-out of CBRS refocuses efforts on scalable Wi-Fi offload. Meanwhile, governance shifts under HIP 141 raise questions about centralization as Nova Labs consolidates control over the roadmap.

article-image

The Arbitrum-based perps DEX recently launched its points campaign

article-image

P2P Foundation founder Michel Bauwens revealed this week that Satoshi wrote him over email in the early days of Bitcoin

article-image

A Blockworks Research report looked at how Hyperliquid has maintained its hype and how it can build out its businesses

article-image

Dragonfly’s Rob Hadick discussed how the firm is approaching investments in the current market

article-image

The asset surged over the past seven days to reach its highest-ever weekly close on the SOL/ETH pair

article-image

Industry watchers note that SOL ETFs have attracted a fraction of the demand for bitcoin and ether ETFs