Genesis Lending Clients,
Many thanks for your continued partnership over the last several months. We have been navigating unprecedented industry challenges – beginning with the default of Three Arrows through the bankruptcy of FTX. And, with your support, we have been laser-focused on evaluating the most effective path to preserve assets and move our business forward for the benefit of all Genesis clients and stakeholders. As you know from our prior client letters, we and our advisors have been engaged in productive discussions with advisors to both our creditors and corporate parent Digital Currency Group.
Moments ago, we announced strategic actions to maximize value for our clients and strengthen our business for the future. In order to advance stakeholder discussions and optimize the outcome for clients, Genesis Global Holdco and two of its lending business subsidiaries, Genesis Global Capital and Genesis Asia Pacific Pte. Ltd., filed voluntary petitions under Chapter 11 of the U.S. Bankruptcy Code.
As part of its Chapter 11 filing, Genesis has proposed a roadmap to an exit. Our goal is to move through the Chapter 11 process as quickly and efficiently as possible while reaching the best outcome and emerging well-positioned for the future.
Through our Chapter 11 plan we will launch a dual track process in pursuit of a transaction to sell all or a portion of our business or make our creditors owners in the business. This would enable the business to emerge under new ownership and pay off creditors by distributing cash and other assets. You can read the full announcement here.
Today’s Chapter 11 filings are focused on our lending business. Our derivatives and spot trading, broker dealer and custody businesses are not included in the filing and continue client trading operations.
At this time, redemptions and new loan originations in the lending business remain suspended. All client claims will be addressed through the Chapter 11 process. Genesis intends to establish a customary claims process for clients. Meanwhile, because of the Chapter 11 filing, an automatic stay has been imposed that prevents Genesis from paying out any claims to its lending customers.
All Genesis lending clients will receive information from our claims and noticing agent Kroll at the appropriate time describing the client claims process. No action is needed at this time, and we will provide further client updates as our process moves forward.
Meanwhile, you can find more information about today’s announcement, including frequently asked questions, on our website. Additional information about the Chapter 11 filing is also available on our case website hosted by Kroll.
We are grateful for your continued patience and support, and we look forward to reaching an equitable solution.
Interim CEO, Genesis