Genesis Warns Of Possible Bankruptcy Without New Funding
Digital asset brokerage Genesis is struggling to raise new capital for its lending arm, and the company has warned potential investors that it may have to file for bankruptcy if its efforts are ignored, according to a Bloomberg News report. The company has faced a cash crunch since FTX filed for bankruptcy earlier this month and was reportedly trying to raise at least $1 billion (roughly Rs. 8,118 crore), as it has talked to Binance and Apollo Global Management. The possible bankruptcy further underscores how the collapse of FTX has sent shockwaves through the broader crypto ecosystem that show no signs of abating.
“We have no plans to go bankrupt now,” said a Genesis representative statements Bloomberg. “Our goal is to resolve the current situation amicably without the need to file for bankruptcy. Genesis continues to have constructive discussions with its creditors.”
The funding push was prompted by a cash crunch for lenders following the sudden collapse of FTX, one of the world’s largest crypto exchanges.
Genesis Global Capital, the lending business of Genesis Trading, last week temporarily suspended redemptions and new loan originations following the collapse of FTX and the filing of Three Arrows Capital earlier this year. At the time, parent company Digital Currency Group said business operations at DCG and its other subsidiaries were not affected.
DCG has given Genesis Trading an equity infusion of $140 million (approx. Rs. 1,136 crore) after it said its derivatives business has $175 million (approx. Rs. 1,420 crore) locked up in the FTX space . “Genesis has no exposure to FTT or other tokens issued on centralized exchanges,” the company said said on Twitter on November 9.
The news jolted crypto investors as Bitcoin extended its intraday decline to a low of $15,649 (roughly Rs. 12.7 lakh), though the token has pared some of those losses, currently priced at $15,732 (roughly Rs 12.77 lakh).