Mirena, Bybit’s investment arm, is a creditor of Genesis, a crypto company that filed for bankruptcy this Thursday (19).
Bybit, according to coinmarketcap ranking, is the 11th largest crypto exchange in the world. With Mirena’s financial health in jeopardy, users fear the exchange will experience an FTX-like meltdown.
In the case of Sam Bankman-Fried’s company, funds from the company’s clients would have been sent without consent to Alameda Research, a trading company led by Caroline Ellison. Irresponsible operations have bankrupted both companies, costing users billions of dollars. Ellison pleaded guilty to charges including fraud and money laundering.
Ben Zhou, CEO of Bybit, made a tweet to try to clarify the situation for your customers:
“Mirana is Bybit’s investment arm. Mirana only manages some of Bybit’s assets. Customer funds are segregated, and the Bybit earn program does not use Mirana. Of the $151 million that Genesis allegedly owes Mirana, around $120 million is in collateralized positions that Mirana has already liquidated,” said the Chinese executive.
Some users, however, raised questions.
J3nqT9 commented that the fact that Zhou said that only “some of Bybit’s assets” are managed by Mirana, without specifying amounts, is worrying, because these “some” could be 8 or 9 digit amounts.
As we reported this morning, Genesis Global Holdco LLC, parent of cryptocurrency platform Genesis Global Capital, has filed for bankruptcy protection in the United States due to two major industry meltdowns in 2022.
The company and its subsidiaries Genesis Asia Pacific Pte. Ltd and Genesis Global Capital, LLC, are part of crypto conglomerate Digital Currency Group (DCG), which also owns CoinDesk and digital asset manager Grayscale.
Genesis estimates it has more than 100,000 creditors and between $1 billion and $10 billion in liabilities, as well as assets of unspecified value. The exchange owes more than $3.5 billion to its top 50 creditors, including crypto exchange Gemini, owned by billionaire Winklevoss brothers.