Just weeks earlier than crypto lender Genesis filed for chapter, three former workers of the corporate claimed that they had secured tens of millions of {dollars} for a brand new crypto hedge fund, in response to correspondence considered by CNBC.
Matt Ballensweig, who left Genesis in September after greater than 5 years on the agency, despatched a message to a potential investor in mid-December, relating to a fund he was beginning known as Hunting Hill Digital. Ballensweig mentioned he had already secured $2.5 million from Bessemer Venture Partners at a $30 million post-money valuation, and wrote within the message that he and his companions had been within the means of elevating one other $5 million.
Bessemer instructed CNBC in an e-mail that they aren’t an investor in Hunting Hill Digital.
The fund’s “flagship product” would go reside within the first quarter of 2023, the message mentioned.
Other companions within the fund would come with Martin Garcia, who spent greater than six years at Genesis, and Reed Werbitt, Genesis’ former head of buying and selling, the message mentioned. Werbitt left Genesis in 2022. and Garcia departed the prior yr.
Genesis, which is owned by Barry Silbert’s Digital Currency Group, filed for chapter safety on Thursday, the most recent casualty within the business contagion brought on by the collapse of crypto trade FTX in November. In its chapter submitting, Genesis listed over 100,000 collectors, with combination liabilities starting from $1.2 billion to $11 billion {dollars}.
Ballensweig was named in authorized filings surrounding the implosion of Genesis’ lending ebook. Gemini, a crypto trade and main Genesis shopper, accused Ballensweig of falsely reassuring Gemini in July that Genesis was financially secure. Gemini claimed that Ballensweig instructed its representatives that Genesis had “capital to operate… for the long term,” in response to court docket filings.
Ballensweig didn’t reply to a request for touch upon the allegations made in opposition to him by Gemini or on his latest capital increase.
Ballensweig spent his last 9 months at Genesis as managing director and co-head of buying and selling and lending.
The ex-Genesis workers teamed up with Adam Guren from hedge fund Hunting Hill, Ballensweig mentioned. Hunting Hill is a $718 million hedge fund, which launched in 2010 and moved into digital asset investing in 2020 with a crypto alternatives fund.
Hunting Hill didn’t instantly reply to a request for remark.
Ballensweig pitched the flagship product as an “alpha multistrat (delta neutral),” or a fund specializing in multi-strategy, low-risk, high-return investments. He added that the trio would additionally launch two different beta merchandise together with a “Top 25 Index” and a “DeFi beta.”
“Think you’d be a valuable early partner,” Ballensweig mentioned in his pitch.
Ballensweig is not the one Genesis alum looking for to launch a fund. Roshun Patel, a former vp at Genesis who left the corporate in March after virtually 4 years, was elevating money for a brand new fund in mid-2022. CNBC reached out to Garcia, Werbitt and Patel for touch upon their raises however didn’t instantly hear again.
Correction: A previous model of this story had the wrong yr for Garcia’s departure from Genesis.
WATCH: Crypto lender Genesis recordsdata for chapter
Source: www.cnbc.com”
