Is Crypto Lender Genesis the Next to Go Bankrupt?
Crypto lender Genesis is yet to receive a critical investment to recover from the collapse of FTX and is now considering following the collapsed exchange to bankruptcy.
Genesis, the crypto brokerage platform that froze withdrawals last week, may resort to bankruptcy if it fails to raise money from potential investors, according to people familiar with the matter.
Genesis has reportedly faced difficulties raising money for its lending unit and told investors it would have to file for bankruptcy, according to a Nov. 21 Bloomberg report.
- As reported by BNN Bloomberg, crypto lender Genesis has spent the past several days attempting to raise $1 billion in capital from potential investors. This backs up a Wall Street Journal report from Friday, which claimedthe trading firm was unsuccessful in its endeavor.
- Bloomberg stated that Genesis was in talks with Binance for a potential investment, but funding is still “yet to materialize.”
- Genesis’s lending arm froze redemptionslast week after another arm of the company revealed it had lost $175 million within FTX. The latter exchange filed for bankruptcy earlier this month when it couldn’t honor a flood of withdrawal requests made days prior.
- FTX now faces a reported shortfall of over $8 billion that it owes to depositors, which include retail clients, institutions, and celebrities
- The fallout has caused other firms to suspend withdrawals as well, including BlockFi and Liquid. The former is also exploringpotential bankruptcy.
- Genesis’s parent company, Digital Currency Group (DCG), offered the broker$144 million in equity on the day of FTX’s bankruptcy, to help tide it over its liquidity difficulties.
- Crypto market maker B2C2 also reached out toGenesis last Wednesday to buy some loans from the trading desk’s book.
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