Ex-Genesis execs claimed they raised cash for crypto hedge fund before bankruptcy

Date:

Share post:


Crypto broker Genesis files for Chapter 11 bankruptcy

Just weeks before crypto lender Genesis filed for bankruptcy, three former employees of the company claimed they had secured millions of dollars for a new crypto hedge fund, according to correspondence viewed by CNBC.

Matt Ballensweig, who left Genesis in September after more than five years at the firm, sent a message to a prospective investor in mid-December, regarding a fund he was starting called Hunting Hill Digital. Ballensweig said he had already secured $2.5 million from Bessemer Venture Partners at a $30 million post-money valuation, and wrote in the message that he and his partners were in the process of raising another $5 million.

Bessemer told CNBC in an email that they are not an investor in Hunting Hill Digital.

The fund’s “flagship product” would go live in the first quarter of 2023, the message said.

Other partners in the fund would include Martin Garcia, who spent more than six years at Genesis, and Reed Werbitt, Genesis’ former head of trading, the message said. Werbitt, Garcia, and Ballensweig all left Genesis around the same time in 2022.

Genesis, which is owned by Barry Silbert’s Digital Currency Group, filed for bankruptcy protection on Thursday, the latest casualty in the industry contagion caused by the collapse of crypto exchange FTX in November. In its bankruptcy filing, Genesis listed over 100,000 creditors, with aggregate liabilities ranging from $1.2 billion to $11 billion dollars.

Ballensweig was named in legal filings surrounding the implosion of Genesis’ lending book. Gemini, a crypto exchange and major Genesis client, accused Ballensweig of falsely reassuring Gemini in July that Genesis was financially stable. Gemini claimed that Ballensweig told its representatives that Genesis had “capital to operate… for the long term,” according to court filings.

Ballensweig did not respond to a request for comment on the allegations made against him by Gemini or on his recent capital raise.

Ballensweig spent his final nine months at Genesis as managing director and co-head of trading and lending.

The ex-Genesis employees teamed up with Adam Guren from hedge fund Hunting Hill, Ballensweig said. Hunting Hill is a $718 million hedge fund, which launched in 2010 and moved into digital asset investing in 2020 with a crypto opportunities fund.

Hunting Hill did not immediately respond to a request for comment.

Ballensweig pitched the flagship product as an “alpha multistrat (delta neutral),” or a fund specializing in multi-strategy, low-risk, high-return investments. He added that the trio would also launch two other beta products including a “Top 25 Index” and a “DeFi beta.”

“Think you’d be a valuable early partner,” Ballensweig said in his pitch.

Ballensweig isn’t the only Genesis alum seeking to launch a fund. Roshun Patel, a former vice president at Genesis who left the company in March after almost four years, was raising cash for a new fund in mid-2022. CNBC reached out to Garcia, Werbitt and Patel for comment on their raises but did not immediately hear back.

WATCH: Crypto lender Genesis files for bankruptcy

Crypto lender Genesis files for bankruptcy, and bitcoin reclaims $21,000 level: CNBC Crypto World



Source link

spot_img

Related articles

Jack Dorsey’s Block shares plunge after Hindenburg report on fraud

Shares of Jack Dorsey's Block plunged 16% after short seller Hindenburg Research announced Thursday that the payment...

Coinbase warned by SEC of potential securities charges

In this photo illustration, the Coinbase logo is displayed on a smartphone screen.Rafael Henrique | SOPA Images...

FAA announces plan to avoid NYC, DC flight delays this summer

An United Airlines seen at LaGuardia International Airport in New York. Adam Jeffery | CNBCThe Federal Aviation Administration on...

Insiders say BTC could test new highs in 2023

Cryptocurrency industry insiders predict bitcoin could hit a new all-time high in 2023 and possibly reach $100,000....