Cryptocurrency brokerage firm Genesis, which is seeking at least $1 billion in fresh capital, warned on Nov. 21 that it might file for bankruptcy without it.
- Cryptocurrency brokerage firm Genesis is reportedly struggling to raise $1 billion and may have to file for bankruptcy.
- It reportedly asked Binance and Apollo for the cash injection. However, Binance decided to pass.
- Last week, its lending unit suspended redemptions and new loans due to the FTX collapse as it had $175 million locked in an FTX trading account.
Genesis Undergoes Several Woes
The lending unit of cryptocurrency investment bank Genesis Global Trading suspended redemptions and new loans due to the FTX collapse on November 16 as it had $175 million locked in an FTX trading account. Following that, it sought help from Binance and Apollo to raise at least $1 billion in fresh capital.
Binance Denies Helping The Firm
According to reports, Binance has rejected an offer to invest in troubled crypto lending firm Genesis because of potential conflicts of interest. The world's largest crypto exchange has reportedly been offered a bid by Genesis for its loan book, but it is unclear whether it would pursue it.
The Bottom Line
Genesis has had a rough 2022, having lent failed Three Arrows Capital $2.4 billion. Its parent company Digital Currency Group (DCG) has a $1.2 billion claim against Three Arrows Capital.
Last week, Digital Currency Group (DCG) Grayscale Bitcoin Trust fell to a record 43% discount following the market collapse. Interestingly, DGC is also the parent company of the crypto news website CoinDesk which reported for the first time about the poor financial condition of the crypto exchange FTX.
Genesis’ financial troubles have also affected the Gemini exchange. The latter announced delays in withdrawals from its Earn product, in which Genesis is a lending partner. The FTX contagion continues to spread through the market and shows no immediate signs of abating.