Genesis Global Capital

Genesis Global Capital, a crypto lending subsidiary of Digital Currency Group, filed for Chapter 11 bankruptcy protection on January 19, 2023.^18121416 The bankruptcy followed the suspension of withdrawals and new loan originations in November 2022, after the collapse of FTX and the default of Three Arrows Capital.¹⁴⁵¹⁰ In May 2024, Genesis settled with the New York Attorney General for $2 billion to repay defrauded investors, and in January 2025, Digital Currency Group and former Genesis CEO Michael Moro agreed to pay $38.5 million to settle SEC charges of misleading investors.⁷¹⁷

Timeline

Money raised

Genesis Global Capital's outstanding loan balance stood at $2.8 billion at the end of Q3 2022.⁴¹⁰ Genesis Global Capital owed creditors at least $3.4 billion at the time of its bankruptcy filing.¹ Genesis listed roughly $5.1 billion of total liabilities in its bankruptcy filing.¹² Genesis had $150 million in cash available to fund the restructuring process.¹⁸ Genesis Asia Pacific loaned Three Arrows Capital $2.36 billion.¹⁴ Genesis raised $140 million from its parent Digital Currency Group after disclosures of the blocking of $175 million of the derivatives unit's funds on FTX accounts.⁴ In May 2024, Genesis settled with the New York Attorney General for $2 billion to repay defrauded investors.¹⁷ In January 2025, Digital Currency Group and former Genesis CEO Michael Moro agreed to pay $38.5 million to settle SEC charges.⁷

Investors named in the sources: Digital Currency Group¹⁴⁷¹⁰.

What happened

Genesis Global Capital, LLC was formed as a Delaware limited liability company in 2017.¹⁵ Genesis launched in 2018 and grew quickly by offering institutional investors low-interest loans to facilitate crypto trading.¹⁰ At its peak, Genesis reported $50 billion worth of outstanding loans.¹⁰ Genesis was a subsidiary of Digital Currency Group, a crypto conglomerate founded by Barry Silbert.¹⁷¹⁰ Genesis connected institutional investors to digital asset markets.¹

Genesis sometimes offered unsecured loans to its clients, which used the borrowed money to raise capital during the crypto bull market.¹⁰ Genesis also engaged in rehypothecation, lending out clients' collateral to other borrowers.¹⁰ Three Arrows Capital owed Genesis Global Capital $2.36 billion.¹⁴ Genesis's parent Digital Currency Group provided support by taking on certain obligations related to the Three Arrows Capital default.⁴ In August 2022, Genesis Global Capital chief Michael Moro left the company after seven years, including six as CEO.⁴

On November 16, 2022, Genesis Global Capital suspended withdrawals and the issuance of new loans.⁴⁵ Genesis said it had hired advisors to explore all possible options and would deliver a plan for the lending business the following week.⁴ The suspension of redemptions left Gemini Earn customers without access to their funds.¹ Some Gemini Earn customers sued the Winklevoss twins for alleged fraud.¹ On January 2, 2023, Cameron Winklevoss published a letter demanding Silbert and Genesis repay Gemini $900 million it said belonged to about 340,000 customers of its Earn product.¹

In a follow-up letter, Winklevoss called for Silbert to be ousted as the CEO of Digital Currency Group.¹ On January 12, 2023, the SEC charged Genesis Global Capital and Gemini Trust Company with selling unregistered securities through the Gemini Earn program.¹³¹⁵ On January 19, 2023, Genesis Global Holdco, Genesis Global Capital, and Genesis Asia Pacific filed for Chapter 11 bankruptcy protection in the Southern District of New York.^18121416 Genesis said in the filing that it owed creditors at least $3.4 billion.¹ Genesis listed more than 100,000 creditors and assets and liabilities between $1 billion and $10 billion.¹¹²

Genesis listed roughly $5.1 billion of total liabilities.¹² Genesis said it had $150 million in cash available to fund the restructuring process.¹⁸ Genesis's spot trading and derivatives subsidiary and Genesis Global Trading did not file for bankruptcy and continued operating.¹⁸ Genesis's restructuring plan included creating a trust to distribute assets to creditors and considered a possible sale or capital raise.⁸ In October 2023, New York Attorney General Letitia James filed a lawsuit alleging Genesis concealed more than $1.1 billion in losses from investors in the Gemini Earn program.¹⁷

The lawsuit was expanded in February 2024 against Digital Currency Group, Genesis, DCG's CEO Barry Silbert, and Genesis's former CEO Soichiro Moro for defrauding additional individuals and institutions of an additional $2 billion.¹⁷ On May 20, 2024, New York Attorney General Letitia James secured a settlement worth $2 billion with Genesis.¹⁷ The settlement established a victims fund to help defrauded investors, including at least 29,000 New Yorkers who contributed more than $1.1 billion through the Gemini Earn program.¹⁷ The settlement also banned Genesis from operating in New York.¹⁷ Under the settlement, Genesis neither admitted nor denied the allegations.¹⁷

The bankruptcy plan became effective on August 2, 2024, and the Wind-Down Debtors' estates began to be managed by a Plan Administrator.¹⁸ From the Effective Date through the present, the Wind-Down Debtors have made four distributions to creditors pursuant to the Plan.¹⁸ In January 2025, Digital Currency Group and former Genesis CEO Michael Moro agreed to pay $38.5 million to settle SEC charges of misleading investors about Genesis's financial condition.⁷ The SEC said that DCG and Moro downplayed the impact of the Three Arrows Capital default in social media posts.⁷

Legal outcomes

• chargedThe SEC charged Genesis Global Capital and Gemini Trust Company with selling unregistered securities through the Gemini Earn program.¹³¹⁵
• filedNew York Attorney General Letitia James filed a lawsuit alleging Genesis concealed more than $1.1 billion in losses from investors.¹⁷
• filedThe lawsuit was expanded against Digital Currency Group, Genesis, Barry Silbert, and Soichiro Moro for defrauding additional individuals and institutions of an additional $2 billion.¹⁷
• settledGenesis settled with the New York Attorney General for $2 billion, without admitting or denying the allegations.¹⁷
• settledDigital Currency Group and Michael Moro settled SEC charges by agreeing to pay $38.5 million, without admitting or denying the findings.⁷

Where the founders are now

Barry Silbert was the founder and CEO of Digital Currency Group, the parent company of Genesis.¹⁷ Cameron Winklevoss called for Silbert to be ousted as the CEO of Digital Currency Group.¹ Soichiro 'Michael' Moro was the former CEO of Genesis Global Capital and left the company in August 2022.⁴⁷ Moro agreed to pay a civil penalty to settle SEC charges without admitting or denying the findings.⁷

Sources

1. Genesis considers filing for bankruptcy as it struggles to raise new funds | Fortune, Fortune, Jan 19, 20
4. Genesis Global Capital suspends crypto-lending operations | ForkLog, ForkLog, 2022-11-16
5. Crypto Companies Around the World Face Aftermath of FTX Collapse — IR Insider, IR Insider, Dec 10, 20
7. Crypto firm Digital Currency Group to pay SEC $38.5 million for misleading investors, NBC New York, Jan 17, 20
8. genesis: Crypto lender Genesis files for Chapter 11 bankruptcy - The Economic Times, The Economic Times, Jan 20, 20
10. Crypto lender Genesis offered unsecured loans before halting operations, Quartz, 2022-11-21
12. Crypto Lender Genesis Files for Bankruptcy, Ensnared by ..., wsj.com, Jan 19, 20
13. Genesis Bankruptcy Lawsuit | Cryptocurrency Settlement Attorneys, nighgoldenberg.com, 2023-04-18
14. Genesis Initiates Process to Achieve Global Resolution ..., businesswire.com, Jan 19, 20
15. Genesis Global Capital, LLC, sec.gov, Jan 12, 20
16. Genesis' Crypto Lending Businesses File for Bankruptcy Protection, coindesk.com, Jan 19, 20
17. Attorney General James Secures Settlement Worth $2 Billion from Crypto Firm Genesis Global Capital for Defrauded Victims, New York State Attorney General, May 20, 20
18. Kroll Restructuring Administration, restructuring.ra.kroll.com

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