Crypto firm Genesis preparing to file for bankruptcy

Cryptocurrency firm Genesis Global Capital is planning to file for bankruptcy as soon as this week, Bloomberg News reported on Wednesday, citing people with knowledge of the situation.

Creditors, Genesis and parent Digital Currency Group exchanged several proposals, but have so far failed to come to an agreement, the report said, adding that Kirkland & Ellis and Proskauer Rose have been advising the groups.

The bankruptcy will be the latest in a string of failures among cryptocurrency firms amid a sector-wide rout.

Core Scientific Inc , one of the biggest publicly traded cryptocurrency mining companies in the United States, said in December, it filed for Chapter 11 bankruptcy protection.

Core Scientific Inc (CORZ.O), one of the biggest publicly traded cryptocurrency mining companies in the United States, said on Wednesday it filed for Chapter 11 bankruptcy protection, the latest in a string of failures to hit the sector.

Austin, Texas-based Core Scientific attributed its bankruptcy to slumping bitcoin prices, rising energy costs for bitcoin mining and a $7 million unpaid debt from U.S. crypto lender Celsius Network, one of its biggest customers.

The company engaged restructuring advisers in October and has been negotiating with creditors about a potential bankruptcy filing since that time.

More than a trillion dollars in value has been wiped out from the crypto sector this year with rising interest rates exacerbating worries of an economic downturn. The crash has eliminated key industry players such as crypto hedge fund Three Arrows Capital and Celsius.