Just a few weeks before crypto lender Genesis submits an application bankruptThree former company employees claim they have secured millions of dollars for a new crypto hedge fund, according to correspondence seen by CNBC.
Matt Ballensweig, who left Genesis in September after more than five years at the company, sent a message to a potential investor in mid-December regarding a fund he was starting called is Hunting Hill Digital. Ballensweig said he received $2.5 million from Bessemer Venture Partners at a post-funding valuation of $30 million and wrote in the announcement that he and his partners are in the process of raising more. 5 million dollars.
Bessemer told CNBC in an email that it is not an investor in Hunting Hill Digital.
The message said the fund’s “leading product” will launch in the first quarter of 2023.
Other partners in the fund will include Martin Garcia, who spent more than six years at Genesis, and Reed Werbitt, Genesis’ former head of trading, the announcement said. Werbitt, Garcia and Ballensweig all left Genesis around the same time in 2022.
Genesis, owned by Barry Silbert’s Digital Currency Group, filed for bankruptcy defended on Thursday, the latest casualty in the industry contagion caused by the collapse of crypto exchange FTX in November. In its bankruptcy filing, Genesis listed more than 100,000 creditors. , with total liabilities ranging from $1.2 billion to $11 billion.
Ballensweig was named in the legal filings surrounding the Genesis loan book explosion. Gemini, a crypto exchange and a major customer of Genesis, accused Ballensweig of falsely reassuring Gemini in July that Genesis was financially stable. Gemini claims that Ballensweig told its representatives that Genesis had “capital to operate… in the long run,” according to court filings.
Ballensweig did not respond to a request for comment about the allegations against him by Gemini or about his recent fundraising.
Ballensweig spent his last 9 months at Genesis as CEO and co-head of trading and lending.
Ballensweig said former Genesis employees teamed up with Adam Guren from the Hunting Hill hedge fund. Hunting Hill is a $718 million hedge fund, launched in 2010 and moving into digital assets in 2020 with a Cryptocurrency Opportunity Fund.
Hunting Hill did not immediately respond to a request for comment.
Ballensweig introduces its flagship product as “alpha multistage (neutral delta)” or a fund that specializes in multi-strategy, low-risk, high-return investments. He added that the trio will also launch two other beta products including “Top 25 Index” and “DeFi beta”.
“Think you’ll be a valuable soon-to-be partner,” Ballensweig said in his introduction.
Ballensweig isn’t the only Genesis alum looking to start a foundation. Roshun Patel, former vice president of Genesis, who left the company in March after nearly 4 years, is raise cash for a new fund in mid-2022. CNBC reached out to Garcia, Werbitt, and Patel for comment on their raise but did not receive an immediate response.
CLOCK: Cryptocurrency lending company Genesis files for bankruptcy
