Genesis lent $1.675B to its own parent — then filed Chapter 11

Genesis Global Capital, the lending arm of Digital Currency Group, ran institutional crypto lending alongside retail yield products — including the Earn program operated with the Gemini exchange. Through 2022 the balance sheet absorbed the year's cascade: first the Terra collapse, then the failure of Three Arrows Capital, and finally the FTX implosion. On 16 November 2022 Genesis froze loan originations and redemptions, citing extreme market dislocation.

On 19 January 2023, Genesis Global Capital and two affiliates filed for Chapter 11 in the US Bankruptcy Court for the Southern District of New York. The petition listed assets and liabilities of $1 billion to $10 billion and an estimated 100,000 creditors, with more than $3.5 billion owed to the top 50 alone — led by Gemini at $769 million. The largest hole pointed inward: parent DCG owed Genesis $1.675 billion — roughly $630 million of unsecured loans due May 2023 and a $1.1 billion promissory note maturing in 2032.

In August 2023 DCG and Genesis reached an in-principle agreement to settle the claims: about $328.8 million over two years, $830 million over seven, and a further $275 million in instalments, with estimated recoveries of 70–90% for unsecured creditors. Gemini, the largest named creditor, was not on board: its co-founder had accused DCG's chief executive of defrauding Earn customers, and the retail depositors sat inside the intercompany IOU.