Creditors of the cryptocurrency brokerage based in the United States known as Genesis are looking into several alternatives to prevent the company filing for bankruptcy. According to individuals with knowledge of the situation, Genesis is attempting to prevent the company from filing for bankruptcy, and the group of creditors is consulting with the legal firm Proskauer Rose for guidance.
Additionally, another group of creditors is working with Kirkland and Ellis, but they have requested that they not be named since the topic at hand is confidential. According to the sources, the parties are also working to eliminate the possibility of catastrophic events comparable to the sudden collapse of FTX.
A spokeswoman for Genesis shared their company’s mission statement, which said, “Our objective is to settle the current crisis in the loan industry without the need for any bankruptcy filing.” On the other hand, officials from Proskauer and K&E have not yet commented on the situation.
On its financial sheet, the brokerage business Genesis reveals that it has outstanding loans totaling $2.8 billion. Roughly thirty percent of these loans were issued to linked parties, such as the company that is Genesis’s parent, Barry Silbert’s Digital Currency Group.
The abrupt failure of FTX is to blame for the upheaval that has been caused in the cryptocurrency market, which has also taken its toll on Genesis. In a statement that was issued to the company’s customers, interim Chief Executive Officer Derar Islim said that discussions with possible investors, as well as the company’s main debtors and creditors, such as DCG and Gemini, had already commenced.
This action is done in order to investigate methods to increase liquidity for its lending business and to better meet the requirements of its customers. In an effort to avoid a possible bankruptcy filing, Genesis Global Capital had discussions with prospective candidates for the position of restructuring specialist last week. Moelis & Company, an investment banking firm, was brought in to help progress discussions and formulate plans.
The loan division of the corporation is in the process of seeking to obtain at least one billion dollars in additional capital right now. Nevertheless, there has been no agreement reached to raise the monies.
Compiled by Coinbold