The foundation extended a loan of roughly $13 million to Genesis in 2022.
Digital Currency Group (DCG) is the parent company of Genesis.
On Thursday, Genesis, a struggling crypto lending behemoth, filed for bankruptcy protection. With the Stellar Development Foundation identified as one of the top creditors.
According to Genesis’s bankruptcy papers, the foundation has a claim for $13 million. It was revealed that the foundation extended a loan of roughly $13 million to Genesis in 2022. But the amount was deemed “immaterial” in comparison to the rest of the foundation’s assets.
Moreover, according to the Stellar Development Foundation, the outstanding claim constitutes an inconsequential fraction of its total treasury and does not affect its activities in any meaningful manner.
Trouble Continues For Crypto Sector
The “Stellar Development Foundation currently holds 30 billion XLM to be used for promoting and enhancing Stellar,” as stated on the organization’s website. Furthermore, Stellar’s XLM tokens are currently trading at a market cap value of over $200 million at the time of writing.
Despite the foundation’s assertions that it has been largely undamaged by the Genesis debacle. Moreover, the intertwining of an ecosystem fund’s assets with an over-the-counter crypto lending desk. Demonstrates the potentially far-reaching effects of the Genesis scandal’s aftermath.
On Thursday, bankruptcy documents showed that the Fairfax County, Virginia pension funds and MoonAlpha Finance, the creators of Babel Finance, were both major creditors of Genesis, both owing $150 million.
Digital Currency Group (DCG) is the parent company of Genesis. Moreover, the Stellar Development Foundation is listed as one of Genesis’ top 50 creditors. Who are owed a total of $3.5 billion, according to the company’s bankruptcy papers.
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