Key Takeaways
- • Former Genesis managing director Matt Ballensweig told a prospective investor in mid-December 2022 that he had secured $2.5 million from Bessemer Venture Partners at a $30 million post-money valuation for a new crypto fund, Hunting Hill Digital, according to correspondence viewed by CNBC.
- • Bessemer Venture Partners told CNBC it is not an investor in Hunting Hill Digital, contradicting Ballensweig's claim.
- • Ballensweig's pitch said the trio was raising another $5 million, with a flagship "alpha multistrat (delta neutral)" product slated to go live in Q1 2023.
- • The solicitation came weeks before Genesis, owned by Digital Currency Group, filed for bankruptcy protection, listing over 100,000 creditors and liabilities of $1.2 billion to $11 billion.
- • Gemini has accused Ballensweig of falsely reassuring it in July 2022 that Genesis was financially stable, per court filings.
Summary
Just weeks before crypto lender Genesis filed for bankruptcy, three former employees claimed they had secured millions of dollars for a new crypto hedge fund, according to correspondence viewed by CNBC. Matt Ballensweig, who left Genesis in September after more than five years at the firm, messaged a prospective investor in mid-December about a fund he was starting called Hunting Hill Digital. He said he had already secured $2.5 million from Bessemer Venture Partners at a $30 million post-money valuation and that he and his partners were raising another $5 million.
Bessemer told CNBC in an email that it is not an investor in Hunting Hill Digital. The message said the fund's "flagship product" would go live in the first quarter of 2023. Other partners would include Martin Garcia, who spent more than six years at Genesis, and Reed Werbitt, Genesis' former head of trading, who left in 2022. Garcia departed the prior year. Ballensweig said the group teamed up with Adam Guren of hedge fund Hunting Hill, a $718 million fund launched in 2010 that moved into digital asset investing in 2020. Hunting Hill did not immediately respond to a request for comment.
Ballensweig pitched the flagship product as an "alpha multistrat (delta neutral)" strategy and said the trio would also launch two beta products, a "Top 25 Index" and a "DeFi beta." "Think you'd be a valuable early partner," he wrote.
Genesis, owned by Barry Silbert's Digital Currency Group, filed for bankruptcy protection on a Thursday, the latest casualty of contagion following the November collapse of FTX. Its filing listed over 100,000 creditors with aggregate liabilities ranging from $1.2 billion to $11 billion. Ballensweig has been named in legal filings tied to the collapse of Genesis' lending book. Gemini, a major Genesis client, accused him of falsely reassuring it in July that Genesis had "capital to operate... for the long term," according to court filings. Ballensweig did not respond to a request for comment on those allegations or on his capital raise.
Roshun Patel, a former Genesis vice president who left in March after almost four years, was also raising cash for a new fund in mid-2022. CNBC reached out to Garcia, Werbitt and Patel for comment but had not heard back.
Bessemer told CNBC in an email that it is not an investor in Hunting Hill Digital. The message said the fund's "flagship product" would go live in the first quarter of 2023. Other partners would include Martin Garcia, who spent more than six years at Genesis, and Reed Werbitt, Genesis' former head of trading, who left in 2022. Garcia departed the prior year. Ballensweig said the group teamed up with Adam Guren of hedge fund Hunting Hill, a $718 million fund launched in 2010 that moved into digital asset investing in 2020. Hunting Hill did not immediately respond to a request for comment.
Ballensweig pitched the flagship product as an "alpha multistrat (delta neutral)" strategy and said the trio would also launch two beta products, a "Top 25 Index" and a "DeFi beta." "Think you'd be a valuable early partner," he wrote.
Genesis, owned by Barry Silbert's Digital Currency Group, filed for bankruptcy protection on a Thursday, the latest casualty of contagion following the November collapse of FTX. Its filing listed over 100,000 creditors with aggregate liabilities ranging from $1.2 billion to $11 billion. Ballensweig has been named in legal filings tied to the collapse of Genesis' lending book. Gemini, a major Genesis client, accused him of falsely reassuring it in July that Genesis had "capital to operate... for the long term," according to court filings. Ballensweig did not respond to a request for comment on those allegations or on his capital raise.
Roshun Patel, a former Genesis vice president who left in March after almost four years, was also raising cash for a new fund in mid-2022. CNBC reached out to Garcia, Werbitt and Patel for comment but had not heard back.
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