Genesis, a cryptocurrency loan firm, has denied rumors that it is preparing to file for bankruptcy “imminently” if it is unable to meet a $1 billion shortfall brought on by the collapse of cryptocurrency exchange FTX.
Company Couldn’t Raise Capital For Lending Section
According to a Nov. 21 Bloomberg story citing people familiar with the situation, the company apparently had trouble raising capital for its lending section and informed investors it would have to file for bankruptcy.
A representative for Genesis informed the media that there were no “imminent” intentions to declare bankruptcy and that the company was still in “constructive” talks with its creditors.
According to the Genesis representative, the firm has no plans to file for bankruptcy. The rep also made it clear that their intentions were to settle the matter without the need to file for bankruptcy.
“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.”
In response to the collapse of FTX, Genesis stated on November 16 that withdrawals had been temporarily halted. On Nov. 10, the business previously disclosed that it had about $175 million in money trapped in an FTX trading account.
Binance Won’t Be Bailing Out Genesis
There have also been rumors that cryptocurrency exchange Binance had been in talks to possibly help the Digital Currency Group-owned lender, but according to sources cited in a Nov. 21 Wall Street Journal report, Binance pulled out of the deal because the deal might have put the company in a conflict of interest.
Binance was in the same situation when news came out that Sam Bankman-Fried’s FTX was in trouble. Binance pulled out of rescuing it in the eleventh hour, citing problems with the company’s internal business practices.
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