While Reportedly On The Verge Of Liquidation, Genesis Refuses To File For Bankruptcy
Since the FTX collapse earlier this month, Genesis, a cryptocurrency lending firm, has been threatened with liquidation. However, there are no indications that it will file for bankruptcy protection.
We Will Not File For Bankruptcy Yet
The Genesis lending firm is on the brink of liquidation following the events of the FTX collapse. This was due to a large number of investors withdrawing their funds from the exchange after FTX collapsed.
Genesis had significant exposure to two failed companies, FTX and Three Arrows Capital (3AC).
However, the company made it clear that despite the current liquidity crisis, it will delay filing for bankruptcy. Nobody can predict what will happen in the future, but as of right now, they are unwilling to proceed to court.
Genesis is appealing to businesses and investors to reinvest in this company in order for it to return to its previous state and overcome the liquidity crunch.
In a statement, a Genesis spokesperson said that the company’s initial goal was to settle the matter amicably without declaring bankruptcy, adding that the company is still looking for investors to provide loans to help remedy the situation.
The company’s attempt to secure more than $1 billion in emergency funding from creditors was unsuccessful. This failure caused Genesis to stop all withdrawals on its lending unit. It also blamed the liquidity crisis on the FTX meltdown, which caused FUD (Fear, Uncertainty, and Doubt) in the crypto space.
Following the event in which the CEO of FTX, Sam Bankman Fried, filed for bankruptcy protection, there was panic and uproar in the crypto space, with investors withdrawing funds from exchanges and transferring them to personal wallets for safety.
Liquidity Crunch Tied To Genesis Ties With FTX
Genesis lending firm’s liquidity problem has been linked to its close relationship with FTX. Genesis was found to have deposited and held over $150 million of its funds in its FTX trading account. It also had a relationship with the 3AC firm, to which it lent over $2 billion before 3AC went bankrupt.
These investments and lending welcomed the liquidity that had taken over Genesis just days after the two exchanges had crumbled and fallen.
However, Genesis has taken steps to recover its losses by contacting the largest cryptocurrency exchange firm, Binance. Genesis reached out to Binance for assistance in resolving its firm’s liquidity crisis, but Binance has not made a note of it or confirmed it yet.
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