Crypto brokerage Genesis is reportedly warning of bankruptcy without new funding, following liquidity crunch triggered by FTX collapse

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  • Genesis is warning potential buyers it could have to file for bankruptcy if it is unable to lift funding for its lending unit, Bloomberg reported. 
  • The crypto brokerage has been looking for not less than $1 billion in contemporary capital, stated the report that cited unnamed sources. 
  • “We have no plans to file bankruptcy imminently,” a Genesis consultant advised Bloomberg. 

Crypto brokerage Genesis is warning potential buyers it could have to file for bankruptcy safety if it fails to lift contemporary funding for its lending unit, Bloomberg reported Tuesday. 

One of the biggest cryptocurrency brokerages for institutional buyers, Genesis over the previous a number of days has been looking for not less than $1 billion in new capital, the report stated, citing sources with information of the matter. 

The report stated there have been discussions with crypto change Binance a couple of potential funding, however funding to date has didn’t materialize. Genesis has additionally contacted Apollo Global Management in an effort to land an funding, however the non-public fairness agency is unlikely to decide to a deal, in keeping with Bloomberg. 

“We have no plans to file bankruptcy imminently,” a Genesis consultant advised Bloomberg in an emailed assertion. “Our goal is to resolve the current situation consensually without the need for any bankruptcy filing. Genesis continues to have constructive conversations with creditors.”

The rush to lift money by Genesis was precipitated by a liquidity crunch at its lending unit after the implosion of crypto change FTX. Genesis halted redemptions shortly after revealing on November 10 that it had $175 million locked in an FTX buying and selling account. 

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FTX, as soon as valued at $32 billion, collapsed this month within the wake of questions on whether or not founder Sam Bankman-Fried mishandled consumer funds, and its failure is reverberating by way of the cryptocurrency trade. FTX’s new administration crew is slated to seem in a Delaware courtroom on Tuesday for the primary time because it pursues bankruptcy safety. 

Bitcoin, the world’s most traded cryptocurrency, was up 1.5% at $16,022 on Tuesday, however has misplaced roughly 65% of its worth throughout 2022 as half of a so-called crypto winter for digital belongings.

Read the unique article on Business Insider

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