• According to a recent report, cryptocurrency lender Genesis Global Capital may soon be filing for bankruptcy.
• The move comes as no surprise, as the company has been in dire straits since November due to the collapse of major cryptocurrency exchange FTX.
• Creditors, which include well-known cryptocurrency exchange Gemini, are reportedly in negotiations with the firm over a bankruptcy plan.
Cryptocurrency lender Genesis Global Capital is reportedly preparing to take the drastic step of filing for bankruptcy. The move comes as no surprise, as the company has been in dire straits since November 16th, when it froze customer redemptions following the collapse of major cryptocurrency exchange FTX.
The implosion of FTX had a devastating effect on Genesis Global Capital’s institutional lending unit, forcing them to take drastic measures, such as suspending redemptions and new originations, in order to protect their financial interests. This move only exacerbated the firm’s financial difficulties, as they now find themselves facing mounting pressure to fulfill their obligations of $900 million worth of locked deposits.
In a bid to address the firm’s financial issues, creditors, which include well-known cryptocurrency exchange Gemini, are said to be in negotiations with Genesis Global Capital over a bankruptcy plan. Under the proposed plan, creditors may agree to a forbearance period of one to two years, in exchange for cash payments and equity in Digital Currency Group, the parent company of Genesis.
The future of Genesis Global Capital remains uncertain, as the company’s financial challenges are far from over. With creditors seeking to take control of the company, and the crypto market remaining volatile, whether or not the firm will be able to survive remains to be seen. For now, all eyes are on the negotiations between Genesis and its creditors, as the fate of the company hangs in the balance.