Just weeks earlier than crypto lender Genesis filed for bankruptcy, three former workers of the corporate had secured hundreds of thousands of {dollars} for a brand new crypto hedge fund, based on 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 on Dec. 13, relating to a fund he was beginning known as Hunting Hill Digital. Ballensweig stated he’d 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 strategy of elevating one other $5 million.
The fund’s “flagship product” would go reside within the first quarter of 2023, the message stated.
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 stated. Werbitt, Garcia, and Ballensweig all left Genesis across the identical time in 2022.
Genesis, which is owned by Barry Silbert’s Digital Currency Group, filed for chapter safety on Thursday, the most recent casualty within the trade contagion attributable to the collapse of crypto alternate 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 e book. Gemini, a crypto alternate and main Genesis consumer, accused Ballensweig of falsely reassuring Gemini in July that Genesis was financially steady. Gemini claimed that Ballensweig informed its representatives that Genesis had “capital to operate… for the long term,” based on 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 remaining 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 stated. 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.
Neither Hunting Hill nor Bessemer instantly responded 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 stated in his pitch.
Ballensweig is not the one Genesis alum in search of to launch a fund. Roshun Patel, a former vice chairman at Genesis who left the corporate in March after nearly 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.