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Genesis entity going up for sale as DCG makes creditor pact

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Bankruptcy

Digital Currency Group (DCG) plans to hand Genesis its stake in the Genesis Global Trading business entity which will then be sold, pending court approval.

Genesis Global has announced it has reached an "agreement in principle" with Digital Currency Group (DCG) which will eventually see its crypto lending and trading arm sold as part of restructuring efforts.

According to a Feb. 6 press release, DCG would contribute its equity in Genesis Global Trading, a trading subsidiary business, to Genesis Global Holdco, the holding entity for Genesis — bringing all Genesis-related entities under the same holding company.

After the transactions are final — pending necessary court approval — Genesis will seek to put its then-owned Genesis Global Trading entity up for sale.

Crypto exchange Gemini also agreed to contribute $100 million for its Gemini Earn users who have funds frozen with the bankrupt firm.

Genesis is currently restructuring as part of its Chapter 11 bankruptcy proceedings stemming from a liquidity crisis in November 2022, brought on by the bankruptcy of crypto exchange FTX.

Genesis Global Trading was not included in the company's Chapter 11 filing at the time saying the business would "continue client trading operations."

At an initial bankruptcy hearing in January Genesis lawyers expressed the firm was looking for a quick resolution to it's creditor disputes and were optimistic the company would come out of Chapter 11 proceedings by late May.

This is a developing story, and further information will be added as it becomes available.

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FTX creditor list shows airlines, charities and tech firms caught in collapse

January 26, 2023 Coin Telegraph

Bankruptcy

The over 100-page long document lists every entity FTX owes money to, inclusive of Big Tech players to local businesses from its Bahamian headquarters.

A complete list of the creditors owed money by the bankrupt cryptocurrency exchange FTX has been released, revealing a myriad of companies and government entities wrapped up in its collapse.

Late on Jan. 25, lawyers for FTX filed its creditor matrix to the United States Bankruptcy Court for the District of Delaware. The massive 115-page document details the names of its creditors in alphabetical order.

The list reveals the sprawling global web of companies from airlines, hotels, charities, banks, venture capital firms, media outlets and crypto companies along with U.S. and international government agencies all owed money by the fallen exchange.

The names of nearly 9.7 million (9,693,985) FTX customers with funds stuck on the exchange were however redacted from the document.

Notable crypto and Web3-related companies owed money by FTX include Coinbase, Galaxy Digital, Yuga Labs, Circle, Bittrex, Sky Mavis, Chainalysis, Messari and entities of Binance.

Big Tech players Apple, Netflix, Amazon, Meta, Google, LinkedIn, Microsoft and Twitter were also included as creditors. The New York Times, Wall Street Journal and CoinDesk were among the media outlets counted.

*"Shark Tank" star Kevin O'Leary (right) pictured with FTX founder Sam Bankman-Fried. O'Leary is a former FTX spokesperson and a production company he owns is listed as a creditor. Image: SALT NY*

The tax offices of multiple U.S. state agencies and the federal Internal Revenue Service (IRS) were listed. Other government entities in Japan, Australia and Hong Kong, among others, are also creditors.

FTX not only owes large entities but seemingly smaller businesses too as a Nassau-based pest control business and a garden centre appear on the list.

The company’s prior public relations company, M Group, appeared as a creditor. FTX hired the firm to represent them, but the company said it ceased work with FTX upon its bankruptcy.

The filing didn’t include what each entity was owed and inclusion on the list does not mean it had a trading account with FTX.

Earlier filings made in November 2022 by FTX’s lawyers speculated the exchange may have over a million creditors.

In a December 2022 tell-all Twitter thread, a previous FTX employee detailed the “moronically inefficient” luxury expenditures of the business.

Some entities on the list point to the company’s prior excessive expenditures, with Uber Eats and Doordash entities from all over North America and Australia expressed on the list along with Airbnb and the names of multiple luxury hotels around the world.

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Crypto exchange Digital Surge emerges as a rare survivor of FTX fallout

January 25, 2023 Coin Telegraph

administration

The Australian crypto exchange lost access to $23.4 million of digital assets when FTX collapsed and FTX’s Australian subsidiary went into administration.

Australian cryptocurrency exchange Digital Surge appears to have narrowly avoided collapse, despite having millions of dollars in digital assets tied up in the now-bankrupt FTX crypto exchange.

On Jan. 24 local time, Digital Surge creditors approved a five-year bailout plan, which aims to eventually refund its 22,545 customers who had their digital assets frozen on the platform since Nov. 16, while allowing the exchange to continue operating.

The rescue plan was first floated to customers by the exchanges’ directors via email on Dec. 8, the same day the company fell into administration.

As per the “Deed of Company Arrangement,” the Australian crypto exchange will receive a 1.25 million Australian dollar ($884,543) loan from an associated business, Digico — allowing the exchange to continue trading and operating.

In a statement, administrators at KordaMentha stated that creditors would be paid over the next five years out of the exchange’s quarterly net profits.

“Customers will be repaid in cryptocurrency and fiat currency, depending on the asset composition of their individual claims,” KordaMentha said, according to a Jan. 24 report from Business News Australia.

Cointelegraph reached out to Digital Surge, which confirmed that creditors voted in favor of the rescue plan at their second meeting, on Jan. 24.

“We expect further communication will be provided to all customers as the administration process with KordaMentha progresses,” it added.

The Brisbane-based crypto exchange had been in operation since 2017 but became one of the casualties of FTX’s collapse in November, freezing withdrawals and deposits only days after FTX filed for bankruptcy and FTX Australia was placed into administration.

At the time, Digital Surge explained they had “some limited exposure to FTX” and would update customers in two weeks’ time — though that exposure was later revealed to be to the tune of around $23.4 million, according to KordaMentha.

The exchange has been one of the few crypto firms to form a solid plan to restart operations and avoid liquidation despite sizeable exposure to FTX.

Since November, several crypto firms, including crypto lending firms BlockFi and Genesis, have filed for Chapter 11 bankruptcy protection as a result of exposure to the fallout of FTX and market turmoil.

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Bankruptcy Code

The decision comes after a Jan. 8 filing by FTX’s lawyers, who argued that public disclosure could create an undue risk of identity theft or unlawful injury to FTX creditors.

The names of up to nine million FTX customers are set to remain confidential for at least three more months following the latest ruling in FTX bankruptcy proceedings.

The decision was reportedly made by Judge John Dorsey in the Delaware-based bankruptcy court on Jan. 11 in response to a 168-page filing by FTX on Jan. 8, which requested the court to withhold confidential customer information.

Judge Dorsey said that he remains “reluctant at this point” to disclose the confidential information, as it may put creditors “at risk,” despite increased pressure from several media outlets:

“We’re talking about individuals here who are not present – individuals who may be at risk if their name and information is disclosed.”

Days earlier, FTX lawyers argued “that disclosure of the information would create an undue risk of identity theft or unlawful injury to the individual or the individual’s property” and that the court should use its “broad discretion” under the U.S. Bankruptcy Code to protect those affected by FTX’s collapse.

In late December, a group of non-U.S. FTX customers also pushed the Delaware bankruptcy court to keep customer information private, arguing in a Dec. 28 joinder filing that public disclosure would cause “irreparable harm.”

Judge Dorsey’s decision does however run contrary to most bankruptcy proceedings where creditor information is disclosed — which is what happened in cryptocurrency lender Celsius’ bankruptcy proceedings in October.

The Delaware-based bankruptcy court hasn’t been as kind to FTX equity holders, having released a Jan. 9 document that disclosed the investors expected to be wiped out and the number of shares they held with FTX.

Among those included NFL legend and former FTX brand ambassador Tom Brady, his ex-wife Gisele Bündchen, tech entrepreneur Peter Thiel and Shark Tank investor Kevin O’Leary.

It appears that progress is being made though, with FTX reported to have already recovered $5 billion in cash and cryptocurrency, FTX attorney Andy Dietderich said in a Jan. 11 statement.

According to early bankruptcy filings in November, more than 1 million creditors were speculated to be involved, with $3 billion being owed to the 50 largest creditors alone.

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