US Crypto Broker Genesis Says It’s Working To Avoid Filing For Bankruptcy

© Reuters. FILE PHOTO: Representative image of virtual cryptocurrency placed on US dollar banknotes in this illustration taken November 28, 2021. REUTERS/Dado Ruvic/Illustration/File Photo

(Reuters) – U.S. crypto brokerage Genesis said it is seeking to avoid bankruptcy after Bloomberg news agency reported on Tuesday that the company’s creditors are holding off with restructuring lawyers. structure to prevent insolvency.

Citing people with knowledge of the situation, the report said law firms Proskauer Rose and Kirkland & Ellis are being advised by groups of creditors who are looking to avoid a situation similar to that of the exchange. FTX cryptocurrency quickly went bankrupt.

“Our goal is to address the current situation in the lending business without having to file for bankruptcy,” a Genesis spokesperson said.

Representatives for Proskauer and K&E did not immediately respond to requests for comment.

“We have begun discussions with our largest potential investors, creditors and borrowers, including Gemini and DCG, to agree on an overall liquidity support solution for our operations. our lending activities and meet the needs of our customers,” said Genesis interim chief executive Derar Islim. customers in a letter seen by Reuters.

The report comes as US state securities regulators are investigating Genesis Global Capital as part of a wide-ranging investigation into the affiliation of crypto companies, Barron’s reported. reported last week, citing a comment from the director of the Alabama Securities Commission.

Genesis hired investment bank Moelis (NYSE:) & Company “to evaluate the best possible asset preservation strategy and implement a roadmap,” the company said in the letter.

The crypto lending arm of U.S. digital asset broker Genesis Trading suspended customer buybacks earlier this month, citing the sudden failure of FTX, where the derivatives business operates. They have about $175 million in funds locked up, the company said.

Venture capital firm Digital Currency Group, which owns Genesis Trading and crypto asset management firm Grayscale, owes $575 million to Genesis’ crypto lending arm, Cryptocurrency CEO Prince Barry Silbert told shareholders this month.

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