Genesis Creditor Groups' Loans Amount to $1.8B and Counting: Sources
Customers whose money is locked up on trading and lending platform Genesis and who have taken legal advice on the matter currently account for some $1.8 billion of loans, according to a person familiar with the situation. And that number looks like it will continue to grow.
The FT had recently reported that a group of customers using cryptocurrency exchange Gemini’s Earn program, which is tied to Genesis, were owed $900 million after Genesis’ lending unit halted customer withdrawals on Nov. 16.
A second group of assorted Genesis creditors, with loans also amounting to $900 million, is being represented by law firm Proskauer Rose, a second source told CoinDesk.
The Proskauer group takes the tally to $1.8 billion, with more to come in the form of a third ad hoc group being represented by Kirkland & Ellis, the law firm representing bankrupt crypto firms Celsius and Voyager Digital, the second source said. The amount of loans this third group is owed is not known. In addition, the Gemini customers group is being represented by law firm Latham & Watkins, the second source said.
In a letter to investors on Nov. 23, Genesis said it had “begun discussions with potential investors and our largest creditors and borrowers, including Gemini and DCG [Digital Currency Group], to agree on a solution that shores up our lending business’ overall liquidity and addresses clients’ needs.”
Genesis declined to comment on this story. Proskauer Rose, Latham & Watkins and Kirkland & Ellis did not respond to requests for comment by press time.
Genesis and CoinDesk are both owned by DCG.