Factbox-Crypto’s string of bankruptcies
LONDON (Reuters) – The lending unit of U.S. crypto firm Genesis filed for U.S. bankruptcy protection on Thursday, the latest company toppled by a market rout last year that wiped about $1.3 trillion off the value of crypto tokens.
While bitcoin has rallied this year, the impact of the market collapse has continued to hit companies in the highly interconnected sector.
Here are the major crypto firms to file for bankruptcy over the last year (listed in reverse chronological order).
Genesis global capital
One of the largest crypto lenders, Genesis froze customer redemptions in November after major exchange FTX stunned the financial world with its bankruptcy. The company is owned by U.S. venture capital firm Digital Currency Group.
In a filing with the U.S. Bankruptcy Court for the Southern District of New York on Thursday, the firm said it had both assets and liabilities in the range of $1 billion to $10 billion, and estimated it had more than 100,000 creditors.
Genesis Global Holdco, the parent group of Genesis Global Capital, also filed for bankruptcy protection, along with another lending unit, Genesis Asia Pacific.
One of the biggest publicly traded crypto mining companies in the United States, Core Scientific Inc cited slumping bitcoin prices, rising energy costs and a $7 million unpaid debt from bankrupt crypto lender Celsius Network as it filed for Chapter 11 in December.
Crypto lender BlockFi filed for Chapter 11 in late November, some two weeks after FTX’s collapse.
BlockFi said its substantial exposure to FTX had created a liquidity crisis. The New Jersey-based lender had relied on a $400 million FTX credit facility to stay afloat after competing crypto lenders Voyager Digital Ltd and Celsius Network went bankrupt earlier in 2022.
The Bahamas-based exchange shocked the crypto world by going bankrupt in November after suffering withdrawals of about $6 billion in just 72 hours and rival crypto exchange Binance ditched a possible rescue.
FTX’s affiliated hedge fund Alameda Research also filed for bankruptcy. The collapse of the companies, founded by former billionaire Sam Bankman-Fried, became one of the most high-profile failures in the crypto sector. Investors in FTX had included BlackRock and Canada’s biggest pension plan.
Bankman-Fried pleaded not guilty this month to criminal charges that he cheated investors in FTX and caused billions of dollars in losses.
A crypto lender brought down by the collapse of terraUSD and luna, Celsius began its U.S. bankruptcy case on July 14.
Since then, Celsius has been embroiled in disputes over fraud investigations, disparate treatment of customer accounts, customer privacy, and its spending on a new bitcoin mining facility.
New Jersey-based crypto lender Voyager Digital filed for bankruptcy in the United States on July 6 after Three Arrows Capital (3AC) defaulted on a crypto loan worth more than $650 million.
The U.S. affiliate of major crypto exchange Binance said in December it intends to buy Voyager’s crypto lending platform in a deal valued at about $1 billion.
The deal, however, could be delayed or blocked in a review by a U.S. body that vets foreign investments into U.S. companies for national security risks.
Three arrows capital
The crypto hedge fund Three Arrows Capital filed for bankruptcy on July 1, brought down by the collapse of the so-called stablecoin terraUSD and its sister token luna in May.
Those meltdowns wiped out $42 billion in investor value, and led to an arrest warrant in South Korea for terraUSD’s developers.
(Reporting by Tom Wilson in London and Dietrich Knauth in New York. Editing by Sharon Singleton)