The lending division of the American cryptocurrency startup Genesis filed for bankruptcy protection last week, becoming the newest business to fail as a result of a market crash that reduced the value of crypto tokens by almost $1.3 trillion last year.
Even though the price of bitcoin has increased this year, the highly interconnected sector has continued to be hit by the effects of the market collapse.
Here are the top cryptocurrency companies that declared bankruptcy in the last year (listed in reverse chronological order).
GLOBAL CAPITAL GENOMICS
One of the biggest cryptocurrency lenders, Genesis, halted customer redemptions in November after the financial world was shocked by the collapse of the important exchange FTX. The American venture capital firm Digital Currency Group is the owner of the business.
The company believed it had more than 100,000 creditors and stated in a petition with the U.S. Bankruptcy Court for the Southern District of New York on Thursday that its assets and obligations were in the $1 billion to $10 billion range.
Along with another loan division, Genesis Asia Pacific, Genesis Global Holdco, the parent company of Genesis Global Capital, also applied for bankruptcy protection.
One of the largest publicly traded cryptocurrency mining companies in the US, Core Scientific Inc., filed for Chapter 11 in December citing falling bitcoin prices, increased energy bills, and a $7 million outstanding debt from the defunct cryptocurrency lender Celsius Network.
BlockFi, a cryptocurrency lender, filed for Chapter 11 bankruptcy in late November, around two weeks after FTX’s demise.
BlockFi claimed that a liquidity crisis had been caused by its significant exposure to FTX. When rival cryptocurrency lenders Voyager Digital Ltd. and Celsius Network filed for bankruptcy earlier in 2022, the New Jersey-based lender was forced to rely on a $400 million FTX credit line to keep solvent.
After experiencing withdrawals of approximately $6 billion in just 72 hours, the Bahamas-based exchange startled the cryptocurrency community by declaring bankruptcy in November, and rival crypto exchange Binance abandoned a potential rescue.
Alameda Research, a hedge firm connected to FTX, also declared bankruptcy. One of the most well-known flops in the cryptocurrency industry was the demise of the businesses formed by former billionaire Sam Bankman-Fried. BlackRock and Canada’s largest pension plan had both invested in FTX.
This month, Bankman-Fried entered a not guilty plea to charges that he defrauded FTX investors and caused billions of dollars in damages.
On July 14, Celsius, a cryptocurrency lender who was dragged down by the failure of terraUSD and luna, filed for bankruptcy in the United States.
Since then, disagreements over fraud investigations, unequal handling of user accounts, protection of consumer privacy, and Celsius’s investment in a new bitcoin mining facility have plagued the company.
Following Three Arrows Capital (3ACdefault )’s on a crypto loan worth more than $650 million, New Jersey-based cryptocurrency lender Voyager Digital filed for bankruptcy in the US on July 6.
Binance’s U.S. subsidiary announced in December that it would be purchasing Voyager’s cryptocurrency loan platform for around $1 billion.
However, a U.S. committee that assesses foreign investments into U.S. corporations for concerns to national security may decide to delay or halt the purchase.
CAPITOL THREE ARROWS
The failure of the so-called stablecoin terraUSD and its sister token luna in May led to the bankruptcy filing of the cryptocurrency hedge fund Three Arrows Capital on July 1.
These crashes destroyed $42 billion in investor wealth and resulted in an arrest warrant for terraUSD’s developers in South Korea.