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Creditors call out Genesis’ “very sloppy” bankruptcy filing: What went wrong?

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Creditors call out Genesis’ “very sloppy” bankruptcy filing: What went wrong?

  • Genesis’ creditors have taken issue with the way in which the bankruptcy filing was made.
  • Mirana and Cumberland have accused the crypto lender of providing misleading and incorrect information.

Genesis Global became the latest crypto firm to succumb to the ongoing crypto winter that has left several firms bankrupt in its wake. The industry had been anticipating the crypto lender’s bankruptcy. However, two particular firms have taken issue with the manner in which Genesis handled its bankruptcy filing. 

“Misleading and incorrect info” by Genesis

Mirana, the investment arm of crypto exchange ByBit, and crypto trading firm Cumberland, have both accused Genesis of handling its bankruptcy filing in a sloppy manner. The crypto lender filed for chapter 11 bankruptcy on 20 January with a whopping $5.1 billion in liabilities. 

Soon after the bankruptcy filing, excerpts from the chapter 11 document started going around on Twitter, outlining how much the lender owed to its creditors. Gemini, Decentraland [MANA], and the Stellar Foundation were among the most recognizable names in the list, who had a combined exposure of $833 million. 

Also on this list was Mirana, with $151 million listed as an unsecured claim to its name. The list also revealed that Cumberland was owed $18 million.

Jonathan Allen, Managing Partner at Mirana Ventures, took issue with the filing, since it only mentioned “Mirana Corp” instead of Mirana Asset Management, the actual creditor. He tweeted:

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“I have no connection to Mirana AM and much of the info including the amount is incorrect. Very sloppy filing.”

Also important to note that Mirana Ventures and Mirana AM are entirely separate sub entities. Mirana Ventures is not a creditor and has no exposure to this. I have no connection to Mirana AM and much of the info including the amount is incorrect. Very sloppy filing. https://t.co/3jyDf7Aaic

— Jon Allen (@jonathantallen1) January 20, 2023

This was followed by a tweet from Cumberland’s official Twitter account, which called out Genesis for putting out “misleading and incorrect information”. According to the crypto trading firm, they had closed their fully collateralized loan to Genesis on 16 November 2022. This left a total exposure of $46,064, instead of the $18 million claimed in the bankruptcy filing. 

Genesis’ bankruptcy filing today reflects misleading and incorrect information, and as part of our commitment to transparency, we are providing more details. pic.twitter.com/FbXlQRAsoE

— Cumberland (@CumberlandSays) January 20, 2023

Soon after the bankruptcy filing, the president of Genesis’ largest creditor threatened its parent firm Digital Currency Group and its CEO Barry Silbert.

Cameron Winklevoss, who has been involved in a public feud with Silbert over the crypto lender’s non-repayment, indicated that he was ready to take legal action against DCG and the chief unless they provided a reasonable solution.

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Ser Suzuki Shillsalot has 8 years of experience working as a Senior Investigative journalist at The SpamBot Times. He completed a two-hour course in journalism from a popular YouTube video and was one of the few to give it a positive rating. Shillsalot’s writings mainly focus on shilling his favourite cryptos and trolling anyone who disagrees with him. P.S – There is a slight possibility the profile pic is AI-generated. You see, this account is primarily used by our freelancer writers and they wish to remain anonymous. Wait, are they Satoshi? :/

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Bankruptcy

Genesis subsidiary sues ‘Bitcoin Jesus’ for $20.86M

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Genesis subsidiary sues ‘Bitcoin Jesus’ for $20.86M

Genesis subsidiary sues ‘Bitcoin Jesus’ for $20.86M Oluwapelumi Adejumo · 12 hours ago · 1 min read

The embattled firm alleged that Ver failed to settle cryptocurrency options trades that expired on Dec. 30, 2022.

1 min read

Updated: January 25, 2023 at 6:39 am

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Cover art/illustration via CryptoSlate

A subsidiary of bankrupt crypto lender Genesis — GGC International Limited — filed a $20.86 million claim against Bitcoin Cash (BCH) proponent Roger Ver, according to a Jan. 23 court filing.

The embattled firm alleged that Ver failed to settle cryptocurrency options trades that expired on Dec. 30, 2022.

The bankrupt company also wants the court to award it the fees it expended in bringing the case against Ver.

Ver has to answer the allegations within the next 20 days — otherwise, a judgment would be taken against him by default.

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GGC is a British Virgin Islands company fully owned by Genesis.The company carries out spot trading activity and enters into derivatives referencing digital assets as a principal, according to the bankrupt lender website.

Meanwhile, crypto exchange CoinFLEX previously accused Roger Ver of owing it $47 million USDC. The exchange later filed a $84 million claim against the investor — Ver denied these allegations.

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altcoin

Decentraland reveals credit against Genesis: Should investors be worried?

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Decentraland reveals credit against Genesis: Should investors be worried?

  • Decentraland provided clarification regarding its dealings with Genesis. 
  • MANA’s price continued to surge but metrics were bearish.

Decentraland [MANA] recently revealed its stand on the ongoing Genesis episode, providing clarity to the network’s investors and users. As per an official tweet on 21 January, the Decentraland Foundation had a credit of around $7.8 million against Genesis.

Full disclosure: The Decentraland Foundation has a credit against Genesis of principal amount approx USD ~7.8M as of today. The Treasury remains healthy and the credit amount does not represent a substantial part of the Foundation’s treasury.

— Decentraland (@decentraland) January 20, 2023


Read Decentraland’s [MANA] Price Prediction 2023-24


However, Decentraland clarified that the credit amount did not represent a substantial part of the Foundation’s treasury. After Genesis was accused of illegal cryptocurrency trading by The Securities and Exchange Commission (SEC) of the United States, many believed that this would be the next domino to fall after the major collapse of FTX a few months ago. 

Moreover, members of the Decentraland DAO, whose members were part of the Decentraland community, had no relationship with Genesis. However, in a surprising turn of events, the tweet laid out that any mentions of the Decentraland Foundation or its officers in reports on the Genesis crisis, which conflicted with the contents of the release, were false.

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Decentraland’s stand is clear 

Fortunately, the Genesis episode did not seem to affect MANA‘s price, as it continued to rally. CoinMarketCap’s data revealed that MANA registered over 15% daily gains, and at the time of writing, it was trading at $0.735 with a market capitalization of more than $1.5 billion. 

Source: CoinMarketCap


Is your portfolio green? Check the Decentraland Profit Calculator


Here is the bad news

While MANA’s price was increasing, the on-chain metrics told a different story. For instance, MANA’s MVRV Ratio declined over the last week. The development activity also followed the same route and went down, which is a negative signal for a network.

CryptoQuant’s data revealed that MANA’s exchange reserve was increasing, suggesting higher selling pressure. Not only that, but MANA’s Relative Strength Index (RSI) and Stochastic were both in overbought positions, which might further increase the selling pressure and result in a price decline soon. 

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Source: Santiment

Ser Suzuki Shillsalot has 8 years of experience working as a Senior Investigative journalist at The SpamBot Times. He completed a two-hour course in journalism from a popular YouTube video and was one of the few to give it a positive rating. Shillsalot’s writings mainly focus on shilling his favourite cryptos and trolling anyone who disagrees with him. P.S – There is a slight possibility the profile pic is AI-generated. You see, this account is primarily used by our freelancer writers and they wish to remain anonymous. Wait, are they Satoshi? :/

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Bankruptcy

Gemini co-founder threatens lawsuit against DCG, Barry Silbert

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Gemini co-founder threatens lawsuit against DCG, Barry Silbert

Gemini co-founder threatens lawsuit against DCG, Barry Silbert Oluwapelumi Adejumo · 2 hours ago · 1 min read

Cameron Winklevoss argued that Genesis’ bankruptcy does not insulate Barry Silbert or DCG from accountability.

1 min read

Updated: January 20, 2023 at 8:41 am

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Cover art/illustration via CryptoSlate

Gemini co-founder Cameron Winklevoss threatened a lawsuit against crypto conglomerate Digital Currency Group (DCG) and its CEO Barry Silbert if they failed to make a “fair offer” to creditors like Gemini Earn users.

Gemini is prepared to take “direct legal action against Barry, DCG, and others who share responsibility for the fraud that has caused harm to the 340,000+ Earn users and others duped by Genesis and its accomplices,” according to Winklevoss’ Jan. 20 Twitter thread.

Genesis’ bankruptcy, a crucial step

Winklevoss said Genesis’ bankruptcy was crucial to recovering Earn users’ assets. He added that the bankruptcy would subject the firm to a judicial oversight that would force it to reveal “machinations that brought us to this point.”

However, he argued that Genesis’ bankruptcy does not insulate Silbert or DCG. Winklevoss added:

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“We also believe that — in addition to owing creditors all of their money back — Genesis, DCG, and Barry owes them an explanation. Bankruptcy court provides a much-needed forum for that to happen. Sunlight is the best disinfectant.”

Winklevoss and Silbert have been engaged in a public dispute over the $900 million owed by Genesis to Gemini Earn. The exchange co-founder accused Silbert of employing “bad faith stall tactics” and called for Silbert to be sacked.

Meanwhile, Genesis disputed the claim that it owes Gemini customers $900 million — court filing showing that the debt to Gemini Earn customers stands at $765.9 million.

The U.S. Securities and Exchange Commission (SEC) charged both firms with selling unregistered securities offerings on Jan. 12.

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