Genesis calls in restructuring expert in its fight to avoid bankruptcy
Cryptocurrency lending firm Genesis Global Capital has reportedly hired a restructuring adviser to explore all possible options that include, but aren’t limited to, a potential bankruptcy.
It is understood that the firm has hired investment bank Moelis & Company to explore options, while people familiar with the situation have stressed that no financial decisions have been made and that it is still possible for the company to avoid a bankruptcy filing, according to a New York Times report on Nov. 22.
Interestingly, Moelis & Company was also one of the firms engaged by Voyager Digital after it suspended withdrawals and deposits on Jul. 1 in order to explore “strategic alternatives.”
Days later, Voyager Digital filed for Chapter 11 bankruptcy in the Southern District Court of New York as part of a reorganization plan that would eventually “return value to customers.”
However, a Genesis spokesperson recently told Cointelegraph that it had no “imminent” plans to file for bankruptcy after a Nov. 21 report from Bloomberg suggested otherwise.
“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,” said the spokesperson.
It is understood that Genesis is seeking somewhere between $500 million to $1 billion from investors to cover a shortfall that ultimately stemmed from “unprecedented market turmoil” and the fall of crypto exchange FTX.
According to a Nov. 22 Bloomberg report, the troubled lending firm has $2.8 billion in outstanding loans on its balance sheet, with around 30% of its lending made to “related parties” including its parent company Digital Currency Group
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