According to the Financial Times, cryptocurrency lending service Genesis and its parent company Digital Currency Group (DCG) owe more than $900 million to clients of the Gemini exchange.
Gemini, founded by Tyler and Cameron Winklevoss, is unsuccessfully trying to recover funds after crypto lender Genesis suffered significant losses due to the collapse of FTX. Genesis and DCG owe more than $900 million to Gemini clients, while venture capital firm DCG, which owns Genesis Trading and Grayscale, accounts for the bulk of the $575 million debt.
Experts note that the presence of large intrastructural loans can cause additional complexity. For example, DCG itself owes about $2 billion to its subsidiary Genesis. DCG declined to comment, but, as it became known to the Financial Times journalists, part of the DCG loans was used to finance the activities of another subsidiary, Grayscale.
Gemini has formed a committee of creditors to resolve the situation, and Genesis has hired investment bank Moelis & Company to explore options, including a potential bankruptcy to recover funds from the sale of Genesis and DCG assets.
Earlier, the head of the technology company Ava Labs, John Wu, noted the importance of the role of Genesis Global Capital in attracting new investors and said that the collapse of a crypto-lender poses a greater risk to the digital asset market than the bankruptcy of the FTX exchange.
Source: Bits
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