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Genesis Refutes Bankruptcy Plans Despite Difficulties in Raising Funds

Cointime Staff· 2 min read

Genesis is still struggling to secure rescue funding amid the liquidity crunch, but the company doesn’t plan for bankruptcy anytime soon.

Embattled cryptocurrency lending firm Genesis has yet to see much success in raising critical investment to resume operations amidst its liquidity struggles. Despite the difficulties, however, the company said on Monday it does not plan to file for bankruptcy protection.

“We have no plans to file bankruptcy imminently. Our goal is to resolve the current situation consensually without the need for any bankruptcy filing. Genesis continues to have constructive conversations with creditors,” a Genesis spokesman noted in an email statement.

Binance Declines to Invest in Genesis

People familiar with the matter told the Wall Street Journal that Genesis had approached some industry-leading firms like Binance and Apollo for potential investment. However, Binance declined to invest in the company on the ground that Genesis’ business might cause a conflict of interest for Binance operations in the future.

Genesis suspended withdrawals on the 16th of November, amid exposure to the bankrupt Sam Bankman-Fried exchange, FTX. According to reports, Genesis had about $175 million in cryptocurrency trapped on FTX. But, the company sought $1 billion in emergency funding before pausing withdrawal, which somewhat indicates a larger shortfall.

Genesis Halves Previous $1 Billion Fundraise Target

Elsewhere, unnamed sources reported that Genesis had slashed its previous $1 billion target to $500 million amidst the difficulties it faces raising an emergency loan.

Earlier, a prominent cryptocurrency market maker B2C2 said it would work with Genesis and their counterparties to novate existing loans from the company. With the state of things currently, it remains uncertain whether the offer still stands. Genesis could still fall back on filing bankruptcy protection should the fundraising plans fail. This could result in more liquidity crunch in crypto.

On November 17th, Gemini already suspended user withdrawals for its crypto yield program due to the troubles at Genesis.

(By Ibiam Wayas)

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