The ripple effect of the downfall of the FTX exchange is a notable drop in the crypto market and many crypto firms facing insolvency issues due to their significant exposure to the bankrupt FTX.
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Genesis is Seeking to Avoid Bankruptcy
Crypto broker Genesis has been facing insolvency issues since the collapse of FTX, like many other crypto firms, Genesis is on the path to filing for creditors’ protection, but a recent presentation revealed that it is on the path to avoid the move.
Citing people with knowledge of the matter, Bloomberg reported on Tuesday that creditors to Genesis are arranging with restructuring lawyers to prevent insolvency.
According to the report, creditors groups are currently looking to avoid what happened to the FTX exchange and are consulting the law firms Proskauer Rose and Kirkland & Ellis.
“Our goal is to resolve the current situation in the lending business without the need for any bankruptcy filing,” a Genesis spokesperson said.
“We’ve begun discussions with potential investors and our largest creditors and borrowers, including Gemini and DCG, to agree on a solution that shores up our lending business’ overall liquidity and addresses clients’ needs,” Genesis’ interim chief executive Derar Islim told clients in a letter seen by Reuters.
This report came not long after the US state securities regulators commenced an investigation on Genesis Global Capital as part of a wide range of connections among crypto firms.
Not long after the FTX debacle, Genesis announced that it is pausing withdrawals on its platform, citing “unprecedented market turmoil”. The firm is also a victim of FTX collapse and it said it has over $170 million locked in its FTX account.
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