Update (0945ET):

A series of headlines have hit Bloomberg about crypto lender Genesis. First, the company, which filed for Chapter 11 bankruptcy protection last night, plans to exit by May 19.

Here are the other headlines:

• GENESIS CREDITORS TO GET EQUITY IN FIRM IF NO SALE CONSUMMATED
• GENESIS SEEKS BIDS FOR SUBSTANTIALLY ALL ASSETS BY APRIL 14 

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Crypto lender Genesis Global Holdco LLC and two of its lending subsidiaries filed Thursday night for Chapter 11 bankruptcy protection in New York. Genesis Global is the latest firm to fold following last year’s implosion of the crypto hedge fund Three Arrows Capital and the collapse of FTX.

Genesis Global Holdco filed for bankruptcy protection along with Genesis Global Capital, LLC and Genesis Asia Pacific Pte. Ltd. Genesis Global Trading wasn’t included in the filing and continues client trading operations.

The filing explained Genesis Global Capital, the partner company to Gemini’s defunct Earn program, had more than 100,000 creditors and between $1 billion and $10 billion in assets and or liabilities. The other entities had assets and liabilities between the $100 million and $500 million range.

Genesis owes its top 50 creditors more than $3.5 billion. Some of those creditors include Gemini, VanEck’s New Finance Income Fund, MoonAlpha Finance, Mirana, and Cumberland. They said talks were ongoing, productive discussions” with the advisers of its creditors, along with its parent company Digital Currency Group in the attempt to find a way to “preserve assets and move the business forward.”

With paused redemptions and new loan originations halted, Genesis wants to reach a solution with its lending business. The lending firm halted withdraws on Nov. 16 following FTX’s collapse.

“Redemptions and new loan originations in the lending business remain suspended, and claims will be addressed through the Chapter 11 process. Genesis and its advisors will continue to evaluate options to advance the process to reach a global resolution,” Genesis said.  

Paul Aronzon, an independent director at Genesis, stated:

“We have crafted a deliberate process and roadmap through which we believe we can reach the best solution for clients and other stakeholders.

“We look forward to advancing our dialogue with DCG and our creditors’ advisors as we seek to implement a path to maximize value and provide the best opportunity for our business to emerge well-positioned for the future.”

The troubles for Genesis began with the crypto bear market early last year. It lent a bunch of money to now-defunct Three Arrows Capital, which blew up last summer. One major issue there was the loans weren’t entirely collateralized. Then things worsened when FTX collapsed in November. Genesis’s loans to Alameda were collateralized via FTX tokens, though the value of the coin plummeted.

Genesis has spent the last few months trying to raise new capital and reach a deal with creditors. However, Gemini co-founder Cameron Winklevoss and Barry Silbert, the chief executive of Digital Currency Group, have argued on Twitter about who is responsible for the repayment of $900 million in assets to approximately 340,000 Gemini users.

After the bankruptcy filing was published, Cameron Winklevoss explained in a series of tweets that bankruptcy is a critical step toward Gemini users being able to recover their assets.

He also said Silbert “continues to refuse to offer creditors a fair deal” and threatened to file a lawsuit “unless Barry and DCG come to their senses.”

Here are Cameron Winklevoss’ tweets:

1/ Earn Update: This evening, Genesis Global Capital, LLC (Genesis) filed for bankruptcy under Chapter 11. This is a crucial step towards us being able to recover your assets.

2/ While we have been working around the clock to negotiate an acceptable solution, @BarrySilbert  and @DCGco — the parent company of Genesis – continue to refuse to offer creditors a fair deal.

3/ The good news is that, by seeking the protection of the bankruptcy court, Genesis will be subject to judicial oversight and be required to provide discovery into the machinations that brought us to this point.

4/ Crucially, the decision to put Genesis into bankruptcy does not insulate Barry, DCG, and any other wrongdoers from accountability.

5/ We have been preparing 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.

6/ Unless Barry and DCG come to their senses and make a fair offer to creditors, we will be filing a lawsuit against Barry and DCG imminently.

7/ Meanwhile, we will use every tool available to us in the bankruptcy court to maximize recovery for Earn users and any other parties within the bankruptcy court’s jurisdiction.

8/ 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.

9/ This marks an important milestone in our efforts to help Earn users get their assets back. Doing so remains our highest priority.

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