The firm had already been charged by the Security and Exchange Commission for illegally selling cryptocurrency.

The looming failure of Genesis - which makes up part of the Digital Currency Group, a 200 crypto brand-strong conglomerate led by CEO Barry Silbert - is connected to the downfall of FTX, which declared bankruptcy in November amid allegations of fraud and other charges.

Derar Islim, the acting CEO said: "We look forward to advancing our dialogue with DCG and our creditors' advisers as we seek to implement a path to maximise value and provide the best opportunity for our business to emerge well-positioned for the future,"

The fund has been established as an “over the counter” Bitcoin platform - which allowed vast quantities of trading - but in early January, they outlined plans to let go of 30 per cent of its staff.

Recently, Genesis was hit with allegations from Cameron and Tyler Winklevoss - the ex Olympic rowers who were involved with the start of Facebook - of foul play amid concerns about the $900 million invested assets deposited by customers of their own crypto venture, Gemini.

The Gemini Earn scheme - which promised returns of up to 7.4 per - has blocked 340,000 investors from accessing their money since late November.

Reacting the bankruptcy, Cameron - who along with his brother was portrayed by Armie Hammer in 'The Social Network’ movie - tweeted: “We have been preparing to take direct legal action against Barry, DCG, and others who share responsibility for the fraud that has caused harm to the 340,000+ Earn users and others duped by Genesis and its accomplices.”

“Unless Barry and DCG come to their senses and make a fair offer to creditors, we will be filing a lawsuit against Barry and DCG imminently.”