Genesis made a lot of noise thanks to the hopes raised by its revision. However, the picture is darker than advertised.
Creditors of Genesis exceeded expectations
As the crypto sector continues to suffer the setbacks of the crisis created by the fall of FTX, what about the trading company Genesis? Nearly two weeks after its fateful bankruptcy date, the company’s management team remains as smart as ever. However, the first doubts are erased by the apparent refusal to quit and after the announcement of a retrial.
However, days after raising the hopes of its customers, Genesis is now painting a much bleaker picture. In fact, the crypto trading business will continue to be burdened with debt as large amounts remain unpaid. According to The Financial Times, no less than 900 million dollars must be paid to Gemini while negotiations are under way to allow for the quick recovery of the jackpot. The true nature of the links between Genesis and the exchange platform established by the Winklevoss twins is still unknown, although the latter is in the midst of maneuvering to allow the payment of its customers.
In addition, while Genesis creditors are rallying to avoid bankruptcy while recovering their funds, new individuals are expected to come together in the coming weeks and join the movement. It also appears that the money to be returned to them is more than expected. At present, the actual length of indemnities that must be paid to the struggling company is not yet determined and may increase over time. However, the amount of their payments is estimated at a minimum of 1.8 billion dollars, after a new group of creditors reported losses of an additional 900 million dollars.
Towards a new domino effect?
Despite the apparent discretion of the management team of Genesis, which did not come to deny or confirm this new assessment of its debt, the atmosphere is pessimistic within the crypto sphere. In fact, the trading company stated that it needed a billion dollars to get out of it, before changing its request downwards. The amount of bills to be paid in the end seems to exceed everything that one imagines and, for two many individuals, the chance of bankruptcy for Genesis is at its highest.
In addition, a new phenomenon of the domino effect is also expected because, according to some Internet users, the parent company of Genesis must sell all its businesses to pay its creditors. A situation that promises to be difficult because of all the loans contracted within the network of companies of the Digital Currency Group and which have already proven the many difficulties that existed before the crisis began.
Finally, the bankruptcy of Genesis and the speculation of the resale of its sister companies do not bode well for the crypto sector. In addition to starting the downfall of the empire created by the Digital Currency Group, they could put all the other companies doing business with it in trouble.
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