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Just weeks before crypto lender Genesis filed for bankruptcy, three former staff of the corporate claimed they 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 in mid-December, relating to a fund he was beginning known as Hunting Hill Digital. Ballensweig stated 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 have been within the technique of elevating one other $5 million.
Bessemer instructed CNBC in an electronic mail that they are usually not an investor in Hunting Hill Digital.
The fund’s “flagship product” would go dwell 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 bankruptcy safety on Thursday, the most recent casualty within the business contagion attributable to the collapse of crypto alternate FTX in November. In its bankruptcy 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 alternate and main Genesis consumer, accused Ballensweig of falsely reassuring Gemini in July that Genesis was financially steady. Gemini claimed that Ballensweig instructed its representatives that Genesis had “capital to function… for the long run,” 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 ultimate 9 months at Genesis as managing director and co-head of buying and selling and lending.
The ex-Genesis staff 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 opportunities fund.
Hunting Hill didn’t instantly reply to a request for remark.
Ballensweig pitched the flagship product as an “alpha multistrat (delta impartial),” 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 would be a worthwhile early associate,” Ballensweig stated 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 raising cash 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.
