2022-11-22 08:00:00

After FTX’s Demise, Cryptocurrency Lender Genesis Denies Plans to File For Bankruptcy

After stopping withdrawals days ago in response to the failure of cryptocurrency exchange FTX, cryptocurrency lender Genesis has denied that it is on the verge of filing for bankruptcy.


On Monday, Genesis declared that it has “no plans” to declare bankruptcy anytime soon and will instead try to reach a “consensual” agreement.


In an email reply to Al Jazeera, a spokeswoman said, “We have no plans to file bankruptcy imminently.” “Our objective is to reach a mutually agreeable resolution to the current situation without declaring bankruptcy. Genesis keeps in touch with its creditors in a positive way.


According to a previous story by Bloomberg News, Genesis, which has offices in New York City, London, and Singapore, was having trouble finding new money for its lending section and had warned investors it would declare bankruptcy if it did not.


The crypto investment bank reportedly spent the previous few days trying to raise at least $1bn in new capital, according to the report, which cited people with knowledge of the situation.


The Wall Street Journal reported on Monday, citing persons familiar with the situation that Binance had been approached by Genesis to invest, but had declined to owe to potential conflicts of interest.


According to the Wall Street Journal article, Genesis also contacted the private equity company Apollo Global Management for financial assistance.


Binance chose not to respond. Apollo has been contacted by Al Jazeera for comment.


One of the biggest cryptocurrency lenders, Genesis Global Capital, this week put a halt to customer withdrawals because of what it claimed was a liquidity deficit brought on by an increase in withdrawal requests following Sam Bankman-collapse.


The third-largest cryptocurrency exchange, FTX, collapsed earlier this month, shocking the industry and drawing analogies to the 2008 collapse of Lehman Brothers as well as accusations of fraud and poor management.


Sam Bankman-Fried, the founder of FTX who left his position as CEO earlier this month, spoke with Vox last week and appeared to retract some of his comments. He expressed regret for his decision to file for bankruptcy protection and accused regulators of failing to protect consumers.


Investors are currently suing Bankman-Fried and other celebrities who pushed FTX for $11 billion.


According to reports, the US Department of Justice and the Securities and Exchange Commission are also looking into possible securities law violations by Bankman-Fried or his business.


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