Crypto Broker Genesis May Seek Bankruptcy Protection

Genesis Global Capital, the institutional crypto brokerage whose lending unit halted customer withdrawals in the aftermath of FTX's failure, is laying the groundwork for a bankruptcy filing, according to reports.

Genesis is reportedly in confidential negotiations with various creditor groups, with the company warning it could seek bankruptcy protection if it fails to raise capital.

Another source unveiled that Genesis is in talks with creditors about a prepackaged bankruptcy plan, which would mean that the two sides would come to a restructuring agreement prior to any filing and that the deal would be then be made final in bankruptcy court.

Since the collapse and bankruptcy of crypto exchange FTX in November, Genesis has been scrambling to raise fresh capital or reach a deal with creditors. The company's institutional lending unit had been forced to suspend redemptions and new originations as a result of the FTX implosion. Plus, Digital Currency Group (DCG) its parent company, has come under increasing pressure to make good on $900 million of locked deposits. Genesis late last year retained investment bank Moelis & Co. to assist with exploring options.

Earlier in 2022, Genesis saw its $2.4 billion loan to hedge fund Three Arrows Capital go bust after Three Arrows collapsed because of its exposure to the Terra network, whose token and stablecoin plunged in value.

Source: CoinDesk