In its current state of difficulty, cryptocurrency brokerage firm Genesis Trading is having a very difficult time raising new financing. According to the most recent WSJ story, the cryptocurrency lender also contacted companies like Apollo Global Management and Binance to submit bids for its loan book.
But according to people with knowledge of the situation, Binance has opted not to invest in Genesis at this time. According to the sources, Binance thinks that certain of Genesis’s operations could eventually lead to a conflict of interest.
Genesis has been preparing to raise $1 billion in new funding over the past few days. This new capital was necessary because the cryptocurrency lender is now experiencing severe liquidity issues due to high platform withdrawal rates. Genesis stopped accepting redemptions on November 10 because it had $175 million locked in an FTX trading account.
The demise of Three Arrows Capital earlier this year marked the beginning of genesis’s problems (3AC). Genesis Global’s parent firm, Digital Currency Group, is suing the hedge fund for $1.2 billion. The Block also received information from a few sources that Genesis has cut its fundraising goal by 50%, from $1 billion to currently only $500 million.
Genesis Confirms No Imminent Plans for Bankruptcy
A Genesis spokeswoman responded to the recent events by stating that there are no “imminent” intentions for bankruptcy. The representative added:
“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 we can see, the demise of the cryptocurrency exchange FTX has significant repercussions for the entire crypto industry. The recent events at Genesis have also caused the cryptocurrency exchange Gemini to temporarily halt its Earn Program. This is so because Genesis is its Earn Program’s lending partner.
In the most recent update, Gemini stated that they are closely collaborating on this issue with Genesis and its parent organization, Digital Currency Group.
https://twitter.com/Gemini/status/1594866655489933312?t=5KVkgBz8FDrwKo6u_Wyo7w&s=19
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