Before Genesis filed for bankruptcy, many of its creditors were sure they would get all or most of their money back.
Months later, some Genesis creators are bankrupting the lender, with even a fraction of their investment in the company, without the conviction that they will get most of their money back.
Sell claims at scrap prices
Stephen Sokolowinski, a crypto mining executive, recently sold $4 million of his claim against Genesis for $1 million to Jefferies, an investment bank. The sale marked the first time publicly revealed sale of the company’s bankruptcy suit. Other listed sales appear to have changed hands via Xclaim.
According to Sokolowski, he had in mind that his Genesis claim would be worth twice what he had bought it for, based on his latest financials.
However, he believes he would see only a fraction if he stayed in bankruptcy proceedings. In addition, he mentioned that, over time, he has lost faith in whatever information Genesis is putting out.
Prohashing’s current COO would also say that he has spent over 100 hours analyzing what he and others like him, creditors, thought were the actual finances of Genesis. On observing him, he thought that Genesis was the safest among the finances of cryptocurrency lenders.
However, he has since retracted the statement, saying the balance sheet was “almost certainly false.” Although he can’t confirm when this happened, they became “more and more flexible” in terms of lending and common sense.
Creditors are fleeing
Other creditors are following suit and constantly losing faith in getting paid by the company. Bitvavo, a Dutch exchange that owed Genesis about $300 million, mentioned their rejection of a Genesis proposal whereby they would pay 70% of what they owed.
Xclaim says the company’s bankruptcy claims only range from $0.35 to the dollar. matthew sedigHowever, the CEO of Xclaim has stated that there appears to be a growing interest from crypto hedge funds and traditional Wall Street firms, among others, in buying into the listed claims of bankrupt crypto lenders.
Some of the major related companies are Barclays, Morgan Stanley, and Bank of America.
However, it remains to be clarified whether they make purchases for themselves or for their customers. Sedigh added that they are all ‘rummaging around’, having processed more claims in the last five weeks than ever before.
