Bankrupt Genesis gets court nod for first day motions

Genesis Global said Monday it received approval from the New York Southern Bankruptcy Court for all first day motions related to its Chapter 11 filing, which will allow it to continue serving its trading clients while undergoing restructuring.

The cryptocurrency lender filed for bankruptcy last week after suffering major losses from its exposure to a string of bankruptcies, including that of exchange FTX (FTT-USD) and liquidated hedge fund Three Arrows Capital.

Genesis’ units involved in derivatives and spot trading and custody businesses, as well as Genesis Global Trading are not included in the filing and continue operations.

“We believe this process represents the best path to continue advancing ongoing, productive conversations with stakeholders to identify an equitable solution,” said Genesis interim CEO Derar Islim.

As of January 19, Genesis had more than $150M in cash, ~$500M in crypto and ~$385M in shares in brokerage accounts. It has ~$505M in outstanding loans to third parties as of November 30, for which Genesis received ~$553M in collateral.

Genesis also has ~$1.68B of claims against its parent firm Digital Currency Group. The company is reportedly aiming to sell its assets and exit bankruptcy by May 19.

Earlier, one of Genesis’ top 50 creditors has ties to two pension funds in Fairfax County, Virginia.