Without Funding, Crypto Brokerage Genesis Alleged to Face Bankruptcy Issues

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Last Updated on November 22, 2022 by Bitfinsider

According to those with knowledge of the situation, digital asset brokerage Genesis is struggling to raise additional funds for its loan division and is warning potential investors that if its attempts fail, it may have to declare bankruptcy.

After cryptocurrency exchange FTX filed for bankruptcy earlier this month, Genesis experienced a liquidity crisis. According to sources, Genesis has spent the last few days looking for at least $US1 billion ($1.5 billion) in new capital. They claimed there were discussions about a prospective investment from the cryptocurrency exchange Binance, but financing has not yet materialized.

In a statement received by email, a Genesis official said, “We have no plans to file bankruptcy imminently,” and that  “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 of current, a Binance official declined to comment.

A shortage of liquidity at the lender following the abrupt closure of FTX, one of the biggest cryptocurrency exchanges in the world, caused a rush for funds. Other platforms are struggling as redemption demands flood in following FTX’s bankruptcy filing, which shook the cryptocurrency sector.

Following the disclosure by a different division that it had $175 million locked in its FTX trading account, Genesis’ lending arm halted redemptions last week.

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