Cryptocurrency lending platform Genesis owes $1.8 billion worth of funds to users, according to a report from CoinDesk.
On Sunday, sources familiar with the matter told CoinDesk that customers seeking legal advice for their funds locked on Genesis are owed a cumulative amount of $1.8 billion. This amount includes $900 million that is owed to users of Gemini’s Earn program, reported by the Financial Times on Saturday.
Gemini, the U.S.-based crypto exchange run by Tyler and Cameron Winklevoss, has now formed a creditors’ committee in a bid to recover the funds locked on Genesis.
According to another source, a second group of Genesis creditors that is represented by the law firm Proskauer Rose, is also owed $900 million. CoinDesk reported that the source with knowledge of the matter said that the total amount owed will likely continue to grow.
The report also highlighted a third group of creditors represented by law firm Kirkland & Ellis with undisclosed loan amounts at press time.
Meanwhile, Genesis is in the process of exploring all options to avoid a bankruptcy filing, with investment bank Moelis & Co. leading the firm’s negotiations.
Last week, Bloomberg reported that Genesis was in talks with potential investors and its largest creditors on ways to enhance liquidity for its lending business. One of the main courses of action appears to be an active effort to raise as much as $500 million to $1 billion from investors.
Genesis’s lending arm first suspended withdrawals and new loan originations on Nov. 16, citing “extreme market conditions” in light of FTX’s collapse.