Genesis' Crypto Lending Businesses File for Bankruptcy Protection

Genesis owes over $3.5 billion to its top 50 creditors, among which include Crypto exchange Gemini, trading giant Cumberland, Mirana, MoonAlpha Finance and VanEck’s New Finance Income Fund, according to the bankruptcy filing published late Thursday.

Shortly after FTX collapsed into its own bankruptcy case in November, Genesis Global Capital was forced to suspend customer withdrawals, which hurt customers of a yield product offered by the Winklevoss twins' crypto exchange, Gemini. Genesis had been scrambling to raise fresh capital or reach a deal with creditors. It – along with parent company Digital Currency Group (DCG), which also owns CoinDesk – was under increasing pressure to make good on $900 million of locked deposits.

Genesis late last year retained investment bank Moelis & Co. to assist with exploring options. Before FTX dealt a blow to Genesis, the failure of crypto hedge fund Three Arrows Capital had caused hundreds of millions of dollars in losses for the firm, CoinDesk reported first last year.

Earlier this month, Genesis announced it was laying off 30% of its staff, taking it down to 145 employees.

Thursday's bankruptcy filing could have broader implications for bitcoin as Genesis and digital assets manager Grayscale share the same parent company in DCG. Grayscale operates the Grayscale Bitcoin Trust (GBTC), which has $10 billion-plus in assets under management and was late last year trading at a record discount to net asset value, although that discount has narrowed recently. There are market fears that the repercussions of the Genesis bankruptcy could somehow lead to the liquidation of GBTC's holdings of 600,000+ bitcoin.

Crypto is inherently worthless ... its apparent “value” accrues solely from ignorant and greedy greater fools who’ve been scammed with FOMO (fear-of-missing-out) generated by paid celeb endorsements and massive fraudulent wash trading that gives the faked impression of a large trading volume, that is, faked numbers that indicate lots of other folks are trading lots of crypto, so you better jump in too before it’s too late ...

crypto also inherently offers zero return, unlike USD denominated assets such as mortgages, auto loans, bonds, CSDs, dividend-yielding securities, etc. ...

therefore ANY entity that CLAIMS to offer “interest” on crypto “deposits” is automatically fraudulent on its face and WILL implode sooner or later ...

outfits claiming to offer “interest” are usually just gambling its client “deposits” that crypto prices will rise indefinitely via the crypto perpetual futures market or some other gambling scheme and/or they are outright Ponzi schemes in which the “interest” is derived from new money “deposited” by new fools ... a variation on the above is for one fraudulent outfit to hand its client “deposits” to some OTHER fraudulent outfit that claims to be paying an even higher “interest” rate with even riskier gambling mechanisms (so-called yield farming) ...

Crypto started off as a fun toy, and that’s where crypto will end up again: a fun toy ... a couple kids in their moms’ basements will be sufficient to provide the computing power to maintain the blockchain ledgers ...

in the mean time, a few EXTREMELY wealthy con artists will have redistributed hundreds of billions of dollars of real wealth to themselves from hundreds of millions of stupid, greedy people who can least afford to lose their paltry savings ... as usual, poor folk, people of color and women most affected ...

to paraphrase a Seinfeld line, “Crypto is an idea about nothing” ... at least with Tulips, one had pretty flowers to look at ...

“Crypto” implies encryption. It’s obviously not very well encrypted if there’s so much fraud and loss.

It’s not currency. Only governments have the right to issue currency.

So what is it?

Scrip that can be exchanged for currency with no guarantee, no backing, no insurance of that ever actually happening.

“Now do “Tether”.”

LOL!

Tether will “do” themselves if/when they’re ever required to undergo a complete, independent, 3rd party audit by a major U.S. accredited auditing firm ... and when it’s shown that their so-called one-one dollar-tether “reserves” are mostly a sham, the entire cryto ecosystem will instantly implode for evermore ...

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