Just Weeks Before Crypto Lender Genesis Filed bankruptcyAccording to communications seen by CNBC, three former employees of the company had set aside millions of dollars for a new crypto hedge fund.
Matt Barensweig, who left Genesis in September after more than five years at Genesis, sent a message to prospective investors in mid-December about a fund he’s about to start called Hunting Hill Digital. It was sent. Ballensweig said he has already secured $2.5 million from Bessemer Venture Partners at a $30 million valuation, and he and his partners are in the process of raising another $5 million, he wrote in a message. .
The fund’s “flagship product” is expected to go live in the first quarter of 2023, the message said.
Other partners in the fund will include Martin Garcia, who spent more than six years at Genesis, and Reed Warbitt, former head of trading at Genesis, the message said.Werbitt, Garcia, and Ballensweig , left Genesis around the same time in 2022.
Owned by Barry Silbert’s Digital Currency Group, Genesis filing for bankruptcy Protection Thursday, the latest casualty of the industry contagion caused by the collapse of crypto exchange FTX in November. Genesis listed more than 100,000 of his creditors in the bankruptcy filing, with total debt ranging from his $1.2 billion to his $11 billion.
Ballensweig is named in legal papers surrounding Genesis’ loan book implosion. Gemini, a major Genesis customer on the cryptocurrency exchange, accused Barensweig of falsely assuring Gemini in July that Genesis was financially stable. Gemini alleged that Ballensweig told its representatives that Genesis “has the capital to operate for the long term,” according to court documents.
Ballensweig did not respond to a request for comment on Gemini’s allegations against him and the recent capital increase.
Ballensweig has spent the last nine months at Genesis as Managing Director and Co-Head of Trading and Lending.
The former Genesis employee has teamed up with Adam Glenn of hedge fund Hunting Hill, Barensweig said. Hunting Hill is a $718 million hedge fund he launched in 2010 and transitioned to digital asset investing in 2020. Crypto Opportunity Fund.
Neither Hunting Hill nor Bessemer immediately responded to requests for comment.
Ballensweig marketed its flagship product as “Alpha Multistrat (Delta Neutral)”, a fund dedicated to multi-strategy, low-risk, high-return investments. He added that the trio will also launch two other beta products, including a “Top 25 Index” and a “DeFi Beta.”
“I think you will be a valuable early partner,” Barensweig said on the pitch.
Barensweig isn’t the only Genesis graduate looking to launch a fund. Roshun Patel, the former vice president of Genesis who left the company in March after nearly four years, said: raise cash For new funds in mid-2022. CNBC reached out to Garcia, Warbitt and Patel for comment on their pay increases but did not immediately hear back.