Prominent cryptocurrency brokerage firm Genesis was working hard to prevent falling under, while bankruptcy seemed to be the dominant subject in the cryptosphere this year. Over the past few months, a large number of businesses were in financial trouble.
According to recent rumors, Genesis was considering how to stay out of bankruptcy. To avoid insolvency, the firm’s creditors were in discussions with restructuring attorneys. Proskauer Rose and Kirkland & Ellis were two of the law firms the creditors were working with.
They want to use this to request a $1 billion emergency loan, which would give the company some breathing room.
These creditors wanted to avoid a situation like FTX’s in particular, thus that was their main goal. Regarding the same, a Genesis spokesperson said,
“Our goal is to resolve the current situation in the lending business without the need for any bankruptcy filing.”
Genesis’ Savior In Disguise
Sadly, Genesis was made aware of FTX’s and Three Arrows Capital’s failure. Recently, it was made public that the company invested $2.36 billion in the troubled company Three Arrows Capital. While this was going on, the collapse of FTX resulted in a further loss of around $7 million for the cryptocurrency brokerage. According to reports, the platform’s derivative operation involved locked funds totaling $175 million.
It should be mentioned that Genesis has loans due of about $2.8 billion.
Genesis was looking for cash to stay out of bankruptcy after suffering a huge loss. A. Derar Islim, interim chief executive of the firm, had hope in other platforms despite Binance’s categorical denial. Islim recently sent a letter to his clients in which he wrote,
“We’ve begun discussions with potential investors and our largest creditors and borrowers, including Gemini and DCG, to agree on a solution that shores up our lending business’ overall liquidity and addresses clients’ needs.”
Genesis is in danger of going out of business without a fresh infusion of cash. According to those with direct knowledge of the situation, the site is alerting potential investors to the terrible state of the situation.
Following FTX’s bankruptcy case, the crypto company’s outlook is gloomy. The lender experienced a liquidity crisis and is looking for a sizable emergency loan to prevent a repeat of that situation.
