According to a letter obtained by The Block, Genesis Interim CEO Derar Islim told clients the firm wants to exit bankruptcy as, “quickly and efficiently as possible.” The crypto lender filed for Chapter 11 Bankruptcy yesterday, following reports of preparations throughout the week.
Islim stated, “Our goal is to move through the Chapter 11 process as quickly and efficiently as possible while reaching the best outcome and emerging well-positioned for the future,” in the retrieved letter. Subsequently, the bankruptcy filing arrived alongside reports the firm owes creditors up to $3.6 billion.
Genesis Seeks Swift Bankruptcy Proceedings
2022 was a treacherous year for the crypto industry. Macroeconomic factors had equated to plummeting prices, and the collapse of various platforms had detrimental effects on companies still standing. These realities all fed into the Genisis bankruptcy filled yesterday.
The firm was negatively impacted by the collapse of both crypto hedge fund Three Arrows Capital, and FTX, last year. The Block reported that Islim highlighted these effects in the same letter to customers issued this morning.
Genesis had paused withdrawals, as well as new loan originations from lending affiliates, on November 16th. Thereafter, Genesis informed clients on January 4th that it was diligently working towards a solution for what The Block refers to as, “the troubled borrowing and lending unit,” in its report.
Now, Islim’s letter to clients stated redemption and loan originations continue to be suspended, while client claims are now addressed through the Chapter 11 proceedings. The bankruptcy filings place an automatic star, preventing the firm from paying claims to customers. Conversely, the interim CEO stated Genesis, “intends to establish a customary claims process for clients.”