Genesis, a cryptocurrency company, is still looking for funding. According to those with knowledge of the situation, the lender has approached the cryptocurrency exchange Binance to make an investment and make a bid for its loan book.
According to one of the people with knowledge of the situation, Binance decided against investing out of concern that some of its business may later result in a conflict of interest. According to people with knowledge of the situation, the company also requested capital assistance from private equity giant Apollo Global Management.
“We have no plans to file bankruptcy imminently. Our goal is to resolve the current situation consensually without the need for any bankruptcy filing. Genesis continues to have constructive conversations with creditors.”a spokesman said
Genesis went through a slew of withdrawals following FTX’s fall
Following the demise of cryptocurrency exchange FTX, Genesis has seen a surge in withdrawals from its lending division. Before announcing to clients in a brief call on Nov. 16 that it was canceling redemptions and loan originations, the company initially asked investors for an emergency loan of $1 billion, according to Genesis.
Derar Islim, the interim chief executive, announced at that meeting that it would present a plan for its lending business this week.
Following the swift and unexpected collapse of FTX founder Sam Bankman-crypto Fried’s empire, Genesis became the most recent cryptocurrency lender to halt withdrawals last week. FTX’s own cryptocurrency was used as collateral for the loans, according to a previous Wall Street Journal report, and was made to Mr. Bankman-affiliated Fried’s trading company, Alameda Research.
According to court records, Genesis gave Three Arrows a $2.4 billion loan earlier this year. Genesis’ parent company, Digital Currency Group, is suing the hedge fund for $1.2 billion. It let go 20% of its 260 employees in August as part of a reorganization that also saw the departure of Michael Moro, the company’s former chief executive.
Changpeng Zhao, the CEO of Binance, announced earlier this month that the company is creating a recovery fund to aid solid cryptocurrency projects that are experiencing brief cash shortages. Mr. Zhao promised more information on the fund in the future.