Crypto lender Genesis reportedly owes creditors $3 billion, and is eyeing the sale of its parent company's venture assets to raise funds
The report comes amid a high-profile dispute between Genesis' parent company and the Winklevoss' crypto exchange Gemini.
Genesis reportedly owes its creditors more than $3 billion as the crypto brokerage's parent company looks to resolve its financial woes from the blowup of Sam Bankman-Fried's FTX and defunct hedge fund Three Arrows Capital.Digital Currency Group (DCG), the crypto conglomerate that oversees Genesis, is also looking to sell assets in its venture portfolio to raise fresh cash, per the Financial Times.DCG has invested in more than 200 blockchain-related startups in at least 35 countries. Investments are worth around $500 million, people familiar with the matter told the news outlet. The Connecticut-based company owns five crypto firms, including industry giants like asset manager Grayscale Investments and trade publication CoinDesk. DCG did not immediately respond to Insider's request for comment.
But the report comes amid a high-profile dispute between DCG and crypto exchange Gemini. In November, Gemini had to halt withdrawals for its interest-bearing product due to a liquidity crisis with Genesis, its lending partner. As a result, $900 million of Gemini customer funds are frozen.Gemini cofounder Cameron Winklevoss called for DCG founder Barry Silbert to step down as chief executive officer, accusing him, the company, and Genesis of fraud. "[Barry] has proven himself unfit to run DCG and unwilling and unable to find a resolution with creditors that is both fair and reasonable," Winklevoss wrote in an open letter, demanding that a new chief exec to "right the wrongs that occurred under Barry's watch."DCG allegedly tried to cover up losses from its massive loans to Three Arrows Capital for months, per Winklevoss. "While we obviously do not agree with everything that Gemini has said, and we are disappointed that Gemini is waging a public media campaign despite ongoing productive private dialogue between the parties, we remain focused on finding a solution for our borrowing and lending intermediation business and reaching the best outcome for all affected Genesis lending and Gemini Earn clients," a Genesis spokesperson told Insider in a statement.The spokesperson added: "We continue working with our advisors, in collaboration with DCG and advisors appointed by various client groups, to evaluate options to preserve client assets and move the business forward."