Genesis Explores Bankruptcy, Hires Restructuring Adviser: Report
Cryptocurrency giant broker Genesis Global Capital has hired specialists from Moelis & Company to consider restructuring options, including a potential bankruptcy, The New York Times has learned, citing three people familiar with the matter.
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The troubled cryptocurrency lender hasn’t made any decisions yet as there was still a possibility for the company to avert a bankruptcy filing, the report noted.
As iHodl earlier reported, Genesis was initially seeking an emergency $1 billion funding from investors before it announced plans of suspending withdrawals. However, later reports said the firm cut its target down to $500 million. It is unclear if the firm managed to raise fresh capital for the updated target.
Binance Says it Will Not Save Genesis Trading
Genesis was reportedly telling potential investors it was seeking an emergency funding due to a “liquidity crunch” triggered by “certain illiquid assets on its balance sheet,” without naming them. Genesis also told investors there was an “ongoing run on deposits driven mainly by retail programs and partners of Genesis (i.e., Gemini Earn) and institutional clients testing liquidity.”
According to reports, Genesis interim CEO, Derar Islim, referred to FTX’s bankruptcy as the reason behind the difficulties during a call last Wednesday.
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