Genesis creditors are looking for options to save the crypto exchange from bankruptcy

Creditors at embattled crypto brokerage Genesis are organizing with restructuring lawyers and are looking at options that would keep the company from bankruptcy, according to people familiar with the situation.

One group of creditors is being advised by Proskauer Rose law firm, while another group is working with Kirkland & Ellis, said the people, who asked not to be identified because the matter was private. After FTX’s quick bankruptcy, the groups are trying to avoid a similarly messy and costly lawsuit for Genesis, the people added.

“Our goal is to solve the current situation in the lending business without filing for bankruptcy,” says a statement from a Genesis spokesman.

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

The brokerage firm has $2.8 billion in outstanding debt on its balance sheet, about 30 percent of which is to related parties, including its parent company, Barry Silbert’s Digital Currency Group. The sudden collapse of FTX, one of the largest crypto exchanges in the world, rocked the crypto market and triggered a liquidity crisis at Genesis. A DCG representative did not immediately respond to a request for comment.

In a letter sent to clients last week and viewed by Bloomberg, interim CEO Derar Islam said Genesis had started talks with potential investors and its largest creditors and borrowers, including Gemini and DCG, to seek liquidity for its lending business to increase and address customers’ needs. The company said it hired Moelis & Co. to evaluate strategies and advance negotiations.

The company has attempted to raise at least $1 billion in fresh cash for its lending unit, but no deal has materialized so far. Some investors approached for the lifeline have balked at the ties between the companies.

Genesis, which warned potential investors it may have to file for bankruptcy if its efforts to raise cash fail, halted redemptions shortly after it announced on Nov. 10 that it had $175 million frozen in an FTX trading account .

https://www.independent.ie/business/world/genesis-creditors-seek-options-to-keep-crypto-exchange-out-of-bankruptcy-42184589.html Genesis creditors are looking for options to save the crypto exchange from bankruptcy

Fry Electronics Team

Fry Electronics.com is an automatic aggregator of the all world’s media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials, please contact us by email – admin@fry-electronics.com. The content will be deleted within 24 hours.

Related Articles

Back to top button