December 3 (Reuters) - Cryptocurrency broker Genesis and its parent company Digital Currency Group (DCG) owe clients of Gemini crypto exchange $900 million, according to a Financial Times report on Saturday.
Cryptocurrency exchange Gemini is seeking to recover funds after Genesis was sidelined last month due to the bankruptcy of Sam Bankman-Freed’s cryptocurrency group FTX, the paper said, citing people familiar with the case.
Venture firm Digital Currency Group, which owns Genesis Trading and crypto asset manager Grayscale, owes $575 million to Genesis’ crypto-lending arm, Genesis CEO told Digital Currency shareholders Barry Silbert last month.
The report adds that Gemini, which operates a cryptocurrency lending product in partnership with Genesis, has now formed a committee of creditors to recover funds from Genesis and its parent company DCG.
Genesis and Gemini did not immediately respond to a Reuters request for comment.
Genesis has hired investment bank Moelis & Company to explore options, including possible bankruptcy, The New York Times reported last month, citing three people familiar with the matter.
Last month, Genesis Global Capital suspended payments to clients from its lending business, citing the sudden bankruptcy of cryptocurrency exchange FTX.
Cryptocurrency trading platform FTX filed for bankruptcy protection in the United States on November 11 in the wake of the most high-profile crypto explosion to date, after traders pulled billions from the platform in three days and rival Binance pulled out of a bailout deal.
Reporting by Shubhendu Deshmukh and Rhea Binoy from Bangalore; Editing by Toby Chopra and Christina Fincher
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