After suspending redemptions for its customers last November and battling Gemini cofounders Cameron and Tyler Winklevoss since then, Barry Silbert’s Genesis Global Trading is considering filing for bankruptcy as soon as this week, Bloomberg reported, citing people familiar with the matter.
Genesis, a subsidiary of billionaire Barry Silbert’s Digital Currency Group that connects institutional investors to digital asset markets, had been trying to raise new funds due to a liquidity crunch, but the search has not been going as planned.
Creditors, Genesis, and DCG have exchanged several proposals, Bloomberg reported, with no luck so far.
DCG did not immediately respond to a request for comment. The company declined to comment to Bloomberg. Genesis did not immediately respond to Fortune’s request for comment.
The company owes creditors $3 billion, according to the Financial Times, and had previously been exploring the sale of some of its holdings to raise cash, including 200 crypto-related companies spanning 35 countries.
Now, the company is working toward a restructuring plan, although plans could change according to Bloomberg, and its creditors have suggested receiving a mix of cash and equity in Digital Currency Group.
Adding to the complicated situation is a recent charge by the Securities and Exchange Commission that Genesis, along with crypto exchange Gemini, sold unregistered securities to retail customers.
Genesis and Gemini had cooperated for Gemini’s yield-bearing product Gemini Earn since 2021, but the relationship soured last November when Genesis suspended redemptions. The move left Gemini Earn customers without access to their funds, some of whom sued the Winklevoss twins for alleged fraud.
On Jan. 2, 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. In a follow-up letter Winklevoss called for Silbert to be ousted as the CEO of Genesis’ parent company Digital Currency Group.
DCG has halted its quarterly dividend payments to conserve cash, and one of its subsidiaries, the crypto news outlet CoinDesk told Bloomberg Wednesday it was considering a partial or full sale.
