1 year ago
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Just weeks earlier crypto lender Genesis filed for bankruptcy, 3 erstwhile employees of the institution had secured millions of dollars for a caller crypto hedge fund, according to correspondence viewed by CNBC.
Matt Ballensweig, who near Genesis successful September aft much than 5 years astatine the firm, sent a connection to a prospective capitalist connected Dec. 13, regarding a money helium was starting called Hunting Hill Digital. Ballensweig said he'd already secured $2.5 cardinal from Bessemer Venture Partners astatine a $30 cardinal post-money valuation, and wrote successful the connection that helium and his partners were successful the process of raising different $5 million.
The fund's "flagship product" would spell unrecorded successful the archetypal 4th of 2023, the connection said.
Other partners successful the money would see Martin Garcia, who spent much than six years astatine Genesis, and Reed Werbitt, Genesis' erstwhile caput of trading, the connection said. Werbitt, Garcia, and Ballensweig each near Genesis astir the aforesaid clip successful 2022.
Genesis, which is owned by Barry Silbert's Digital Currency Group, filed for bankruptcy extortion connected Thursday, the latest casualty successful the manufacture contagion caused by the illness of crypto speech FTX successful November. In its bankruptcy filing, Genesis listed implicit 100,000 creditors, with aggregate liabilities ranging from $1.2 cardinal to $11 cardinal dollars.
Ballensweig was named successful ineligible filings surrounding the implosion of Genesis' lending book. Gemini, a crypto speech and large Genesis client, accused Ballensweig of falsely reassuring Gemini successful July that Genesis was financially stable. Gemini claimed that Ballensweig told its representatives that Genesis had "capital to operate... for the agelong term," according to tribunal filings.
Ballensweig did not respond to a petition for remark connected the allegations made against him by Gemini oregon connected his caller superior raise.
Ballensweig spent his last 9 months astatine Genesis arsenic managing manager and co-head of trading and lending.
The ex-Genesis employees teamed up with Adam Guren from hedge money Hunting Hill, Ballensweig said. Hunting Hill is simply a $718 cardinal hedge fund, which launched successful 2010 and moved into integer plus investing successful 2020 with a crypto opportunities fund.
Neither Hunting Hill nor Bessemer instantly responded to a petition for comment.
Ballensweig pitched the flagship merchandise arsenic an "alpha multistrat (delta neutral)," oregon a money specializing successful multi-strategy, low-risk, high-return investments. He added that the trio would besides motorboat 2 different beta products including a "Top 25 Index" and a "DeFi beta."
"Think you'd beryllium a invaluable aboriginal partner," Ballensweig said successful his pitch.
Ballensweig isn't the lone Genesis alum seeking to motorboat a fund. Roshun Patel, a erstwhile vice president astatine Genesis who near the institution successful March aft astir 4 years, was raising cash for a caller money successful mid-2022. CNBC reached retired to Garcia, Werbitt and Patel for remark connected their raises but did not instantly perceive back.
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