Crypto Firm Genesis Struggles to Raise Fresh Capital, In Talks with Binance – Next Domino to Fall From FTX Contagion?
The troubled crypto trading firm Genesis is reportedly struggling to raise fresh funds for its lending unit - and may be headed into bankruptcy.
According to Bloomberg, citing people with knowledge of the matter, the company has spent the past several days looking to raise a minimum of $1 billion in fresh capital, but seemingly with no luck.
A major crypto exchange has been reportedly involved in the talks, but also with no deal signed, suggested the report, stating:
The funds raising effort "included talks over a potential investment from crypto exchange Binance, [...] but funding so far has failed to materialize."
As reported, Genesis had sought an emergency loan of $1 billion before closing redemptions for clients last week. It admitted that it was experiencing a “liquidity crunch due to certain illiquid assets on its balance sheet,” and added that it faced an “ongoing run on deposits driven mainly by retail programs and partners" and "institutional clients testing liquidity.” It did not manage to secure the needed credit facility.
The inability to raise sufficient funds could spell major trouble for the company. Citing the sources, the report stated that,
Genesis "is warning potential investors that it may need to file for bankruptcy if its efforts fail."
However, per a statement by a Genesis representative, the bankruptcy filing is not on the table at this point, as the company is still in talks with creditors. The person was quoted as saying that,
“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.”
As reported, the crypto lending division of Genesis Trading,
Read more on cryptonews.com
