Crypto Broker Genesis Facing Bankruptcy?!

Genesis Global Capital is a cryptocurrency lender in the world of digital assets. In the wake of the FTX's collapse, Genesis Global Capital went into a strange silence after stating that its cryptocurrency lending unit would cease operations. At the same time, it attempted to gather more funding five days ago. The company claimed that the increased withdrawal level at that instance was more significant than it could manage. The Wall Street Journal also revealed that Genesis utilised FTX's cryptocurrency as collateral for loans made to Alameda Research, a trading company linked with FTX that Mr Bankman-Fried created.

However, the consequent lack of communication has given rise to rumours concerning the company's overall health and that of its parent company Digital Currency Group and sister division Grayscale Investments.

According to a Bloomberg article, the beleaguered crypto investment bank is in talks with possible investors for at least $1 billion in new financing. However, insiders revealed that Binance decided not to invest in Genesis, fearing that some of its activities could result in a conflict of interest in the future.

Furthermore, it was also reported that Genesis approached a massive private equity firm, Apollo Global Management (APO), for capital assistance.

On Monday, 22nd November, crypto exchange Gemini which runs a crypto lending product in partnership with Genesis, tweeted that it will continue working with Gemini to enable users to redeem funds from its yield-generating “Earn” programme. Could this be seen as a piece of solid evidence that Genesis is actually going nowhere and is here to stay？

Honestly speaking, this is hard to conclude Genesis' financial status and future plans with just a single Tweet. This is because this event happened when the cryptocurrency market was under tremendous stress and volatility due to the failure of FTX, once one of the biggest exchanges by volume, which declared bankruptcy 10 days ago. The company reported that 130 additional connected companies, including FTX US and Alameda Research, also started the bankruptcy procedure.

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