By Michael Scott
Genesis Global submitted a bankruptcy filing to a federal bankruptcy court in New York earlier this week. High-profile crypto and investment firms criticized the Chapter 11 bankruptcy protection filing, citing the filing as inaccurate and misleading the investors.
Genesis Bankruptcy Filing
On January 19, the crypto lender Genesis filed the Chapter 11 bankruptcy protection to create more value for crypto entrepreneurs. Genesis’ strategic move was influenced by failed attempts to restore the operation of its main lending department at the beginning of this year.
In a previous engagement with the Genesis community, the firm announced reducing expenses to redirect the resources in reviving the ailing borrowing and lending sector. The troubled crypto lender also regretted that its unhealthy finances were grounded citing the bearish steam fueled by the FTX collapse.
According to the bankruptcy filing, the embattled crypto lender Genesis unveiled a list of unsecured claims worth $3.6 billion. The mentioned claims constitute 50 borrowers owing Genesis substantial amounts. On the list, Plutus crypto firm and VanEck investment owe the risk management firm $30M and $53M, respectively.
Why the Crypto Community Condemns the Bankruptcy Filing?
Despite Genesis’s effort to remain afloat in the market, the firm’s bankruptcy filing prompted a huge backlash in the crypto realm. The first to respond was a business associate at Mirana Ventures, Jonathan Allen, who argued that the filing provided incorrect information.
According to the filings, Mirana Corporations is among the top five debtors in the claim list owing $151 million. Also, Allen, who is listed as Mirana’s contact person, called the filling “sloppy.”
Afterward, Allens addressed the Twitter crypto fans who were confusing Mirana Ventures with credit firm Mirana Asset Management (MAM). On his Twitter account, Allen denied engaging with Mirana Asset Management.
Interestingly, Allen’s remarks coincided with Cumberland’s Genesis filings speculations. A January 20 tweet from the Cumberland group proclaimed the Genesis filings captured inaccurate information. According to the tweet, Cumberland committed $18M last November to repay Genesis a collateral-backed loan. After reviewing the claim list under question, the Cumberland team restated that after the November loan payment, Genesis owes the firm $46064.34, which is unsettled.
After settling last year’s loan, Cumberland has yet to borrow from the risk management firm Genesis.
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