A cryptocurrency brokerage Genesis is pushing out all the brakes and seeking all available measures to stave off bankruptcy attorneys.
Attorneys specializing in liquidation and restructuring are working together with the company’s creditors to determine the best course of action for keeping the business open. According to a report from BeInCrypto, the cryptocurrency lending site temporarily disabled withdrawals on November 16.
Bloomberg reported on November 30, citing unidentified sources, that creditors are seeking legal counsel from several companies.
Creditor organizations are attempting to avoid the circumstances that led to FTX International’s demise earlier this month. “Our objective is to handle the current issue in the loan industry without declaring for bankruptcy,” a representative said.
According to the study, Genesis has around $2.8 billion in outstanding debts. Almost a third of it was allocated to linked firms, including Digital Currency Group, the parent corporation. Its issues are a result of unpaid debts with Alameda.
Three Arrows Capital, a crypto hedge firm that is now insolvent, was a major lender to the company as well. DCG disclosed a $2 billion debt over the weekend, the majority of which is payable to Genesis.
The interim CEO of Genesis, Derar Islim, said last week that discussions with possible investors had started. In addition, the company employed Moelis & Co. to review strategy and promote discussions.
Genesis has requested a $1 billion loan owing to a “liquidity shortage caused by some illiquid assets on its balance sheet.” It has not secured rescue investments. According to the article, some investors have been cautious owing to the “interconnectedness of the firms.”
Genesis continues to teeter on the brink of bankruptcy. If investments do not materialize, Chapter 11 might be unavoidable.
Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial or investment advice. Cryptocurrency investments are subject to market risks, and individuals should seek professional advice before making any investment decisions.