{"id":514994,"date":"2022-11-24T02:52:00","date_gmt":"2022-11-23T23:52:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/crypto-genesis-meltdown-why-investors-are-worried-about-bigger-problems-for-crypto\/"},"modified":"2022-11-24T02:52:00","modified_gmt":"2022-11-23T23:52:00","slug":"crypto-genesis-meltdown-why-investors-are-worried-about-bigger-problems-for-crypto","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/crypto-genesis-meltdown-why-investors-are-worried-about-bigger-problems-for-crypto\/","title":{"rendered":"#Crypto: Genesis meltdown: Why investors are worried about bigger problems for crypto"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a3364f47c6e7\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a3364f47c6e7\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/crypto-genesis-meltdown-why-investors-are-worried-about-bigger-problems-for-crypto\/#%E2%80%9CCrypto_Genesis_meltdown_Why_investors_are_worried_about_bigger_problems_for_crypto%E2%80%9D\" >&#8220;Crypto: Genesis meltdown: Why investors are worried about bigger problems for crypto&#8221;<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/crypto-genesis-meltdown-why-investors-are-worried-about-bigger-problems-for-crypto\/#Frances_Yue\" >Frances Yue<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9CCrypto_Genesis_meltdown_Why_investors_are_worried_about_bigger_problems_for_crypto%E2%80%9D\"><\/span>&#8220;Crypto: Genesis meltdown: Why investors are worried about bigger problems for crypto&#8221;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<h2 class=\"article__subhead\" itemprop=\"alternativeHeadline\">\n<\/h2>\n<p><\/p>\n<div class=\"column column--full article__content\">\n<div class=\"article__side\">\n<div class=\"container--sticky not-active\">\n<div id=\"cx-next\" data-nosnippet>\n              <\/div>\n<\/p><\/div>\n<\/p><\/div>\n<div id=\"js-article__body\" class=\"article__body article-wrap at16-col16 barrons-article-wrap crawler\" itemprop=\"articleBody\" data-sbid=\"WP-MKTW-0001425556\" role=\"document\">\n<div class=\"barrons-article-ad-wrapper\">\n<div data-track=\"barrons-article-ad-wrap\" class=\"barrons-article-ad sticky_item\">\n<div class=\"barrons-main-article-ad-target sticky_target body_ad\" aria-hidden=\"true\"><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<div data-layout=\"\n                inline\" data-layout-mobile=\"\" class=\"\n          media-object\n          type-InsetArticleReader\n              \n              inline\n  article__inset\n          article__inset--type-InsetArticleReader\n              article__inset--inline\n  \"><\/p>\n<div class=\"media-object-article-reader\">\n<div class=\"audioplayer\" data-sbid=\"WP-MKTW-0001425556\" role=\"region\" aria-label=\"Listen to Article\" tabindex=\"-1\" id=\"articlereader\" data-show-title=\"false\" data-theme=\"wsj-article-reader\" data-show-header=\"false\" data-show-subscribe=\"false\" data-ads-enabled=\"true\" data-save-publication=\"false\">\n        <\/div>\n<\/p><\/div>\n<\/p><\/div>\n<p>       Investors are worried that liquidity problems for crypto financial-services firm Genesis could spill over to its parent company, Digital Currency Group, and damage the already battered crypto market even further, after Genesis\u2019s lending arm paused withdrawals last week.\u00a0<\/p>\n<p> Genesis has been trying to raise at least $1 billion from investors and warned that it may need to file for bankruptcy if the efforts fail, according to <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.bloomberg.com\/news\/articles\/2022-11-21\/crypto-firm-genesis-warns-of-possible-bankruptcy-without-funding?sref=OQBow3f2\" class=\"icon none\">a Bloomberg report<\/a> Monday. The company has hired investment bank Moelis &amp; Co. to explore potential options, Genesis said.\u00a0<\/p>\n<div class=\"paywall\">\n       Founded by billionaire Barry Silbert, DCG is one of the largest crypto companies in the world. In addition to Genesis, it also owns Grayscale, backer of the world\u2019s largest bitcoin fund, crypto <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">news<\/a> publication CoinDesk and digital asset exchange Luno, among others.\u00a0<\/p>\n<p>A letter to investors by Silbert on Tuesday, obtained by MarketWatch, partly revealed the interconnectedness between DCG and Genesis. DCG has a liability to Genesis of about $575 million, due in May 2023, Silbert said in the letter. He also mentioned a $1.1 billion promissory note due in 2032, which was the result of DCG assuming Genesis\u2019s liabilities from the default of crypto hedge fund Three Arrows earlier this year.\u00a0<\/p>\n<p>A Genesis spokesperson said Monday that the company has no plans to file bankruptcy imminently. \u201cOur goal is to resolve the current situation consensually without the need for any bankruptcy filing,\u201d the spokesperson told MarketWatch.<\/p>\n<p>\u201cWe\u2019ve begun discussions with potential investors and our largest creditors and borrowers, including Gemini and DCG, to agree on a solution that shores up our lending business\u2019 overall liquidity and addresses clients\u2019 needs,\u201d Derar Islim, interim chief executive at Genesis, wrote to clients on Wednesday, according to a letter obtained by MarketWatch. \u201cWe expect to expand these conversations in the coming days,\u201d Islim wrote. Genesis\u2019s spot and derivatives trading and custody businesses remain fully operational, according to Islim. <\/p>\n<p>However, without outside funding, Genesis\u2019s lending unit will likely see increasing withdrawals once the freeze is lifted, and might be facing bigger problems and even be forced into bankruptcy, said Eric Snyder, a bankruptcy attorney at Wilk Auslander.\u00a0<\/p>\n<p>Meanwhile, the current fundraising environment in crypto is challenging, as digital-asset prices have crashed following the bankruptcy of crypto exchange FTX earlier this month and shaken some investors\u2019 confidence in the space, noted Rich Lee, a lawyer at Crowell &amp; Moring. Genesis earlier said it had about $175 million in funds locked in FTX.\u00a0<\/p>\n<p>If Genesis files for bankruptcy, DCG could be hit hard as the value of its equity in Genesis might drop to close to zero, noted James Van Horn, a bankruptcy lawyer at Barnes &amp; Thornburg. \u201cMost of the time across any industry, oftentimes unless every other creditor is going to get paid 100% in full with interest, the equity is worth nothing,\u201d Van Horn said. <\/p>\n<p>What\u2019s more, in <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/general\/\" data-internallinksmanager029f6b8e52c=\"3\" title=\"General\" target=\"_blank\" rel=\"noopener\">general<\/a>, when a company files for bankruptcy, it might expose parent companies to various court claims, said Jonathan Pasternak, a bankruptcy attorney at Davidoff Hutcher &amp; Citron. \u201cThose will all be scrutinized, and it could entangle the parent, force it to join the subsidiary in the bankruptcy.\u201d\u00a0<\/p>\n<div id=\"cx-membership-tile\"><\/div>\n<p>In DCG\u2019s case, one key question is whether it has provided guarantees for Genesis\u2019s outstanding debt to other companies, noted Snyder.\u00a0<\/p>\n<p>In addition, if Genesis files for bankruptcy, its bankrupt estate will be obligated to pursue the $575 million liability from DCG and collect it as efficiently as possible, bringing more pressure to DCG, said Van Horn. <\/p><\/div>\n<\/div><\/div>\n<p><\/p>\n<div class=\"byline article__byline\">\n<p>    <span>By<\/span><\/p>\n<div class=\"author mobile-scrim hasMenu\" data-scrim='{\"type\":\"author\",\"header\":\"Frances Yue\",\"subhead\":\"The Wall Street Journal\",\"list\":[{\"type\":\"link\",\"icon\":\"bio\",\"url\":\"https:\/\/www.marketwatch.com\/topics\/journalists\/frances-yue\",\"text\":\"Biography\"},{\"type\":\"link\",\"icon\":\"twitter\",\"url\":\"https:\/\/twitter.com\/FrancesYue_\",\"text\":\"@FrancesYue_\"},{\"type\":\"link\",\"icon\":\"email\",\"url\":\"http:\/\/www.marketwatch.com\/news\/mailto:frances.yue@marketwatch.com\",\"text\":\"frances.yue@marketwatch.com\"}]}' itemscope itemprop=\"author\" itemtype=\"http:\/\/schema.org\/Person\">\n<h4 itemprop=\"name\"><span class=\"ez-toc-section\" id=\"Frances_Yue\"><\/span>Frances Yue<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p><ufc-follow-author-widget product=\"marketwatch\" author-id=\"256_MW\" author-name=\"Frances Yue\" signin-url=\"https:\/\/accounts.marketwatch.com\/login?target=https%3A%2F%2Fwww.marketwatch.com%2Fstory%2Fgenesis-meltdown-why-investors-are-worried-about-bigger-problems-for-crypto-11669246859%3Frss%3D1%26siteid%3Drss\" panda-api=\"https:\/\/follow-api.marketwatch.com\"><\/ufc-follow-author-widget><\/div>\n<\/div>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more News articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/news\/\" target=\"_blank\" rel=\"noopener\">News category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"http:\/\/www.marketwatch.com\/news\/story.asp?guid=%7B20C06575-04D4-B545-715C-0941C88ACA7F%7D&#038;siteid=rss&#038;rss=1\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;Crypto: Genesis meltdown: Why investors are worried about bigger problems for crypto&#8221; Investors are worried that liquidity problems for crypto financial-services firm Genesis could spill over to its parent company, Digital Currency Group, and damage the already battered crypto market even further, after Genesis\u2019s lending arm paused withdrawals last week.\u00a0 Genesis has been trying to&#8230;<\/p>\n","protected":false},"author":1,"featured_media":514995,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.mktw.net\/im-673168\/social","fifu_image_alt":"","footnotes":""},"categories":[70897],"tags":[],"class_list":["post-514994","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/514994","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=514994"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/514994\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/514995"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=514994"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=514994"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=514994"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}