1.2 k views

Genesis Bankruptcy Filing Contains Misleading and Incorrect Information: Cumberland

Cumberland – an institutionally focused crypto asset trading company – claims Genesis published misleading information about its unsecured claims against the lending giant in its bankruptcy filing on Thursday. 

Clearing the Air on Creditor’s Claims

“Genesis’ bankruptcy filing today reflects misleading and incorrect information, and as part of our commitment to transparency, we are providing more details,” said Cumberland over Twitter on Friday. 

The filing, which provided a list of 50 creditors with the largest unsecured claims, listed Cumberland as number 37, citing an “unliquidated” claim of $18,720,061.

Cumberland, however, said it notified Genesis that it would liquidate its $18 million loan on November 16, surrendering its cash collateral and closing out the loan. The loan was fully collateralized. 

“This left an outstanding balance due to us of approximately $46,064.34 consistent with our November tweet,” the company continued. In November, the company stated that it had less than $10 million of exposure to FTX, less than $1 million of exposure to Genesis, and no exposure at all to either BlockFi or Alameda Research. It claims to have no outstanding borrows from Genesis, and to have not increased its exposure since that time. 

Genesis Fallout

As one of the largest institutional lenders in crypto, Genesis claimed $5.1 billion in liabilities within its first-day bankruptcy filing. Many firms looked to Genesis to generate yield on their assets. However, the company began to falter after the collapse of crypto hedge fund Three Arrows Capital in June. 

Digital Currency Group (DCG), the parent company of Genesis, said it tried to assume some of the lending unit’s liabilities. Still, this additional support came in the form of $1.2 billion “promissory note” due in 2032, which Gemini co-founder Cameron Winklevoss called a “complete gimmick” earlier this month.

The situation at Genesis worsened after FTX went under in early November, inside which the company lost $175 million. The platform had to halt withdrawals later that month. Ultimately, it filed for bankruptcy on Thursday after failed attempts to raise fresh cash.  

Bitcoin live price
price change

Users of Gemini’s Earn program still have their funds locked within Genesis. Winklevoss has since accused Genesis, Barry Silbert, and DCG of misrepresenting their financials to Gemini. 

Stay up to date with our latest articles