Ex-Genesis executives raised cash for crypto hedge fund earlier than chapter

Cryptocurrency broker Genesis files for Chapter 11 bankruptcy

Simply weeks earlier than crypto lender Genesis filed for chapter, three former workers of the corporate raised thousands and thousands of {dollars} for a brand new crypto hedge fund, in response to correspondence seen by CNBC.

Matt Ballensweig, who left Genesis in September after greater than 5 years on the firm, despatched a message to a possible investor in mid-December a few fund he was beginning referred to as Looking Hill Digital. Ballensweig mentioned he had already secured $2.5 million from Bessemer Enterprise Companions at a post-money valuation of $30 million, and wrote within the message that he and his companions have been within the strategy of elevating one other $5 million.

The fund’s “flagship product” would go reside within the first quarter of 2023, the message mentioned.

Different companions within the fund could be Martin Garcia, who spent greater than six years at Genesis, and Reed Werbitt, Genesis’ former head of buying and selling, in response to the message. Werbitt, Garcia and Ballensweig left Genesis on the similar time in 2022.

Genesis, which is owned by Barry Silbert’s Digital Foreign money Group, filed for chapter safety on Thursday, the newest casualty within the trade contagion attributable to the collapse of crypto trade FTX in November. In its chapter submitting, Genesis listed greater than 100,000 collectors, with combination liabilities starting from $1.2 billion to $11 billion.

Ballensweig was named in authorized filings relating to the implosion of Genesis’ mortgage ebook. Gemini, a crypto trade and main consumer of Genesis, accused Ballensweig of falsely reassuring Gemini in July that Genesis was financially secure. Gemini claimed that Ballensweig informed his representatives that Genesis had “capital to function … for the long run,” in response to courtroom filings.

Ballensweig didn’t reply to a request for touch upon the allegations made towards him by Gemini or his current capital increase.

Ballensweig spent his final 9 months at Genesis as managing director and co-head of buying and selling and lending.

The previous Genesis workers joined Adam Guren of hedge fund Looking Hill, Ballensweig mentioned. Looking Hill is a $718 million hedge fund, which launched in 2010 and moved into investing in digital belongings in 2020 with a crypto alternative fund.

Neither Looking Hill nor Bessemer instantly responded to a request for remark.

Ballensweig pitched the flagship product as an “alpha multistrat (delta impartial),” or a fund that makes a speciality of multi-strategy, low-risk, high-return investments. He added that the trio would additionally launch two different beta merchandise, together with a “Prime 25 Index” and a “DeFi beta.”

“I believe he could be a invaluable beginning associate,” Ballensweig mentioned in his launch.

Ballensweig is not the one Genesis alumnus trying to launch a fund. Roshun Patel, a former vp at Genesis who left the corporate in March after practically 4 years, was elevating cash for a brand new fund in mid-2022. CNBC reached out to Garcia, Werbitt and Patel for touch upon their raises, however didn’t hear again. immediately

SEE: Cryptocurrency lender Genesis information for chapter

Crypto Lender Genesis Files For Bankruptcy, Bitcoin Claims $21,000 Level: CNBC Crypto World

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