- Genesis reported struggles in raising funds for its lending unit after the fall of FTX.
- FTX’s bankruptcy filing this month caused Genesis to face a liquidity crunch.
- The crypto lender reportedly approached Binance and Apollo Global Management to solicit bids for its loan book.
Crypto lending platform Genesis reported struggles in raising funds for its lending unit after the fall of Sam Bakman-Fried’s exchange platform FTX. The company warned that it may file for bankruptcy if the efforts to raise liquidity fail.
FTX’s bankruptcy filing this month caused Genesis to face a liquidity crunch, and the company has spent the past few days seeking at least $1 billion in new funds. Reportedly, Genesis’ lending arm froze withdrawals last week after another of its division disclosed it had $175 million locked in its FTX account.
Genesis has however dismissed the rumors of bankruptcy by stating:
We have no plans to file for 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.
Investors were alarmed about Genesis and other struggling crypto businesses like BlockFi. The price of Bitcoin had also been roughly flat since November 2020 but was soon back to normal in some time.
According to the reports, the crypto lender reportedly approached companies like Binance and Apollo Global Management to solicit bids for its loan book. However, at this time, Binance has decided not to invest in Genesis. According to the sources, Binance thinks that some of Genesis’s businesses could eventually lead to a conflict of interest.
Furthermore, in a tweet posted on Monday, Gemini, a cryptocurrency exchange that partners with Genesis to provide a crypto loan product, stated that it was still working with Genesis to enable users to withdraw funds through the latter’s yield-generating “Earn” program.
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