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Unchained

Two Genesis Creditors Describe Their Frustrations With the Bankrupt Crypto Lender - Ep. 565

Nov 4, 2023
BJ and Branden, pseudonymous creditors of the bankrupt crypto lender Genesis, share their harrowing experiences with the company and its parent, Digital Currency Group. They discuss their initial decision to invest further into Genesis after the fallout from the Three Arrows Capital collapse. The duo expresses their frustration over the alleged fraud and seeks faster repayment of the $1.1 billion owed, emphasizing the need for transparency and actual Bitcoin returns. Their insights shed light on the wider implications of the ongoing legal battles and the complexities of navigating bankruptcy.
01:28:36

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Podcast summary created with Snipd AI

Quick takeaways

  • The Genesis creditors formed an ad hoc group to save the company and offered $900 million in liquidity to cover Gemini-earned withdrawals.
  • Genesis extended loans to DCG after the Three Arrows Capital bankruptcy, revealing a $1.1 billion hole in their balance sheet.

Deep dives

Genesis creditors offer to help fill liquidity hole

The Genesis creditors, including the ad hoc group, formed to save Genesis, offered to provide $900 million in liquidity to cover the Gemini-earn withdrawals. They believed there was a liquidity mismatch due to borrowers having longer-term loans. However, they later discovered a $1.1 billion hole in Genesis's balance sheet, which was never filled by parent company DCG. Further negotiations with DCG resulted in differing valuations of the $1.1 billion promissory note, with Genesis claiming it was worth $1.1 billion, while DCG argued for a lower valuation of $200 million. Genesis eventually filed for bankruptcy on January 19th, 2023, claiming DCG owed $500 million and over 4,500 Bitcoin.

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