Bloomberg reported that Genesis is in dire straits as it seeks to raise new funding for its lending unit or risk potential bankruptcy. However, the cryptocurrency lender dismissed the reports on Monday, stating that it has “no plans” to declare bankruptcy and instead hopes to reach a “consensual” arrangement with its creditors. In an email statement to Reuters, Genesis said:
“We have no plans to file bankruptcy imminently. Our goal is to resolve the current situation consensually without the need for any bankruptcy filing. Genesis continues to have constructive conversations with creditors.”
On Wednesday, Genesis tweeted that the company was experiencing a liquidity crisis due to the exceptional market instability caused by FTX’s collapse. This led to “abnormal withdrawal requests which have exceeded our current liquidity,” Genesis said. The company has “temporarily ceased redemptions and new loan originations in the lending business.” However, the ban has not been lifted since its initial implementation.
The Wall Street Journal reported that Binance, a cryptocurrency exchange, turned down an investment offer from Genesis because of a possible conflict of interest. The company reportedly also sought investment from private equity firm Apollo Global Management (NYSE:APO).
Gemini and Genesis work together to offer a cryptocurrency loan product. On Tuesday, Gemini tweeted that the two companies would continue to work together to make it easy for customers to withdraw funds from Genesis’s “Earn” program, which generates interest for users.
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Sam Bankman-Fried’s doomed FTX Exchange is still making waves, and Gemini and Genesis’s actions are just the most recent ones. The implosion of FTX has wiped out a number of businesses, including trading desks and venture firms, and caused other lending establishments to cease withdrawals.
Genesis is one of the most important organizations in the cryptocurrency industry. Some believe that if Genesis is experiencing significant problems that have a low probability of being resolved, then the company’s negative impact on the market and the industry may be much worse than that of FTX.
Read more on the contagion facing the cryptocurrency industry:
Paradigm Co-Founder “Deeply Regrets” Investing in FTX, Writes Down Investment to $0
Genesis Sought a $1 Billion Emergency Loan Before Halting Withdrawals
See original on DailyCoin
Source: Cryptocurrency - investing.com
