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Binance Refuses Any Investment to Save Crypto Lender Genesis, Bankruptcy Ahead?

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Binance Refuses Any Investment to Save Crypto Lender Genesis, Bankruptcy Ahead?

Crypto brokerage firm Genesis Trading is struggling majorly to raise fresh capital in its current time of distress. As per the latest WSJ report, the crypto lender also approached players like Binance and Apollo Global Management to bid for its loan book.

However, sources familiar with the matter said that Binance has decided not to invest in Genesis at this point. As per the sources, Binance believes that some of Genesis’s businesses might create a conflict of interest in the future.

Over the last few days, Genesis has been planning to raise $1 billion in fresh capital. The reason behind this fresh funding is that the crypto lender is facing a huge liquidity crunch amid massive withdrawals on the platform. On November 10, Genesis halted redemptions stating it had $175 million locked in an FTX trading account.

genesis’s troubles started earlier this year with the collapse of Three Arrows Capital (3AC). Digital Currency Group, the parent company of Genesis Global, has a $1.2 billion claim again the hedge fund. A few of the sources also told The Block that Genesis has reduced its fundraising target by 50% from $1 billion to now at $500 million.

Genesis – No Imminent Plans for Bankruptcy

Commenting on the current developments, a Genesis spokesperson said that they have no “imminent” plans of filing for bankruptcy. The spokesperson added:

“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.”

As we can see, the collapse of the crypto exchange FTX has far-reaching consequences in the crypto sector. The recent developments at Genesis have also led to the crypto exchange Gemini stopping its Earn Program for the time being. This is because Genesis is the lending partner for its Earn Program.

In the recent update, Gemini said that they are working closely with Genesis and its parent company Digital Currency Group on this matter. “This remains our highest priority and we understand Genesis and DCG remain committed to exploring every possible option to fulfill their obligations to Earn users,” they added.

What if Genesis becomes the next to fall after FTX? This could lead to a massive correction in the crypto space and could be worse than the FTX episode.

Source: ethereum.today

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