On Tuesday, U.S. Genesis crypto brokerage announced that it was seeking to escape bankruptcy after Bloomberg News reported on Tuesday that the company’s creditors were teaming together with restructuring lawyers to avoid bankruptcy.
According to a report citing sources with knowledge of the matter, creditor groups are seeking advice from Proskauer Rose and Kirkland & Ellis law firms in an effort to avoid a scenario resembling the swift bankruptcy of cryptocurrency exchange FTX.
“Our goal is to resolve the current situation in the lending business without the need for any bankruptcy filing,” a Genesis spokesperson said.
“We’ve begun discussions with potential investors and our largest creditors and borrowers, including Gemini and DCG, to agree on a solution that shores up our lending business’ overall liquidity and addresses clients’ needs,” Genesis’ interim chief executive Derar Islim told clients in a letter according to Reuters.
“We’ve begun discussions with potential investors and our largest creditors and borrowers, including Gemini and DCG, to agree on a solution that shores up our lending business’ overall liquidity and addresses clients’ needs,” Genesis’ interim chief executive Derar Islim told clients in a letter according to Reuters.
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According to a statement from the director of the Alabama Securities Commission, the report comes as U.S. state securities authorities are looking into Genesis Global Capital as part of a comprehensive investigation into the connections between crypto firms.
The investment bank Moelis & Company said in the letter that Genesis has hired them “to evaluate the best possible asset preservation strategy and effectuate a roadmap.”
The abrupt fall of FTX, where its derivatives business has around $175 million in frozen assets, led Genesis Trading’s crypto lending arm to suspend customer redemptions earlier this month, the company had said.
Digital Currency Group, which owns Genesis Trading and cryptocurrency asset manager Grayscale, owes $575 million to Genesis’ crypto lending arm, according to Digital Currency Chief Executive Barry Silbert.
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