The Financial Times first reported on Saturday that Genesis allegedly owes $900 million to Gemini customers. Winklevoss’ twins crypto exchange, which previously relied on Genesis as a primary lending partner for its high-yield Earn service, is now attempting to recover the funds with the help of the law firm Latham & Watkins, CoinDesk sources claim.
In addition to funds owed to Gemini users, Genesis owes another $900 million to a group of assorted creditors represented by the law firm Proskauer Rose. Finally, there’s also a third group that is working with Kirkland & Ellis, the law firm that advised bankrupt crypto firms Celsius and Voyager Digital. However, the amount of loans owed to this group is still unknown, CoinDesk reported.
For context, Genesis’ crypto-lending unit suspended withdrawals on November 16, citing “unprecedented market turmoil.” The firm also revealed that it had $175 million stuck in an FTX trading account.
According to Bloomberg, the troubled company is currently in talks to raise at least $1 billion in fresh cash that can keep its lending unit afloat. Genesis also said it hired investment bank Moelis & Co to explore all possible strategies that would keep it out of insolvency proceedings. However, the bankruptcy option is still on the table if Genesis’ efforts to raise cash fail.
“Our goal is to resolve the current situation in the lending business without the need for any bankruptcy filing,” a Genesis spokesperson said in a statement shared with Bloomberg.
