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Genesis Global Capital, one of the industry’s leading cryptocurrency lenders, has filed for bankruptcy protection on January 19, 2023. Digital Currency Group wholly owns the cryptocurrency lending company.
The cryptocurrency lender has opted to file for bankruptcy protection as it continues to struggle after the third largest cryptocurrency exchange, FTX, filed for bankruptcy on November 11, 2023.
Genesis is not the first cryptocurrency lender to file for bankruptcy. Previously, Celsius Network, Voyager Digital and BlockFi chose to file for bankruptcy protection to protect themselves from bankruptcy.
Edward Moya, Senior Market Analyst at Oanda, said in an interview with a prominent cryptocurrency media outlet: You don’t have to touch FTX to go bankrupt, and that theme may continue for a while for many struggling crypto companies. ”
Francesco Melpignano, CEO of Kadena Eco, a layer-1 blockchain, believes that “contagion from these meltdowns will continue to ripple through this year and possibly the next few years.”
Campbell Harvey, a professor of finance at Duke University, was asked: Crypto trending caput? He replied: “I don’t think so”. He believes the business model is still sound and has room for the future of finance.
Campbell is an author and has also written the book “DeFi and the Future of Finance”.
What could explain this disregard for basic risk management practices? The second question from a finance professor was, “It’s easy to start a business when prices are going up.” I was.
Eylon Aviv, principal at venture capital firm Collider Ventures, sees cryptocurrency lending as “an essential primitive to the growth of the cryptocurrency ecosystem.”
Meanwhile, speaking to a crypto media outlet, Elon said:We are currently trapped in a transitional maze between centralized actors [Genesis, 3AC, Alameda Research] Poorly managed risk and have a scalable solution for failing handshake transactions.decentralized actor [Compound, Aave] Have a resilient but not scalable solution”
On January 6, 2023, Crypto Media reported that Genesis laid off 30% of its workforce in its second round of layoffs to cut costs amid an ongoing downward trend.
The crypto market has been struggling since the end of 2021, with multiple companies filing for bankruptcy throughout 2022.
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