Days after suspending withdrawals due to liquidity problems, Crypto broker Genesis Trading has warned of possible bankruptcy should efforts for new funding fail.
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FTX Contagion Keeps Spreading
As per sources, the digital assets broker has spent a lot of time seeking at least $1 billion in new capital, this includes talks with the world’s largest cryptocurrency exchange, Binance over possible funding but was turned down.
The recent condition of Genesis Trading is due to the recent collapse of Sam Bankman-Fried FTX exchange, one of the world’s leading cryptocurrency exchanges, Genesis was facing a liquidity crisis because of FTX’s downfall which “created unprecedented market turmoil, resulting in abnormal withdrawal requests which have exceeded our current liquidity.”
On November 10, Genesis paused withdrawals on its platform following the revelation of the $175 million locked in the insolvent FTX exchange.
“We have no plans to file bankruptcy imminently,” a representative for Genesis said. “Our goal is to resolve the current situation consensually without the need for any bankruptcy filing. Genesis continues to have constructive conversations with creditors.”
Due to the downfall of FTX, many crypto firms are now facing insolvency issues, currently, over 120 firms have filed for creditors protections due to their affiliation to the bankrupt FTX and Alameda research.
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