• A former Genesis employee sent a message to a prospective investor in December, regarding a fund he was starting called Hunting Hill Digital.
• The fund would be run by three ex-Genesis employees, the message said.
• Genesis, which is owned by Barry Silbert's Digital Currency Group, filed for bankruptcy protection on Thursday.

Just weeks before crypto lender Genesis filed for bankruptcy, three former employees of the company 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, sent a message to a prospective investor in mid-December, regarding a fund he was starting called Hunting Hill Digital. Ballensweig said he had already secured $2.5 million from Bessemer Venture Partners at a $30 million post-money valuation, and wrote in the message that he and his partners were in the process of raising another $5 million.

Bessemer told CNBC in an email that they are not an investor in Hunting Hill Digital.

The fund's "flagship product" would go live in the first quarter of 2023, the message said.

Other partners in the fund would include Martin Garcia, who spent more than six years at Genesis, and Reed Werbitt, Genesis' former head of trading, the message said. Werbitt left Genesis in 2022. and Garcia departed the prior year.

Genesis, which is owned by Barry Silbert's Digital Currency Group, filed for bankruptcy protection on Thursday, the latest casualty in the industry contagion caused by the collapse of crypto exchange FTX in November. In its bankruptcy filing, Genesis listed over 100,000 creditors, with aggregate liabilities ranging from $1.2 billion to $11 billion dollars.

Ballensweig was named in legal filings surrounding the implosion of Genesis' lending book. Gemini, a crypto exchange and major Genesis client, accused Ballensweig of falsely reassuring Gemini in July that Genesis was financially stable. Gemini claimed that Ballensweig told its representatives that Genesis had "capital to operate... for the long term," according to court filings.

Ballensweig did not respond to a request for comment on the allegations made against him by Gemini or on his recent capital raise.

Ballensweig spent his final nine months at Genesis as managing director and co-head of trading and lending.

The ex-Genesis employees teamed up with Adam Guren from hedge fund Hunting Hill, Ballensweig said. 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 did not immediately respond to a request for comment.

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 also launch two other beta products including a "Top 25 Index" and a "DeFi beta."

"Think you'd be a valuable early partner," Ballensweig said in his pitch.

Ballensweig isn't the only Genesis alum seeking to launch a fund. Roshun Patel, a former vice president at Genesis who left the company in March after almost four years, was raising cash for a new fund in mid-2022. CNBC reached out to Garcia, Werbitt and Patel for comment on their raises but did not immediately hear back.

Correction: A prior version of this story had the incorrect year for Garcia's departure from Genesis.

WATCH: Crypto lender Genesis files for bankruptcy