Genesis hires a restructuring adviser; bankruptcy is not ruled out

    23 Nov 2022

    Troubled crypto lender Genesis Global Capital has hired specialists from Moelis & Company to consider restructuring options, including a potential bankruptcy, The New York Times reported, citing sources familiar with the matter.

    The crypto broker hasn’t made any decisions yet as there was still a possibility for the company to avert a bankruptcy filing, the NYT report noted.

    As earlier reported, Genesis was initially seeking an emergency $1 billion funding from investors before it announced plans of suspending withdrawals. Although later reports said the firm cut its target down to $500 million. It is unclear if the firm managed to raise fresh capital for the updated target.

    Earlier this week, Genesis paused withdrawals and new loans citing issues arising from the collapse of FTX and its associated companies. The actual condition Genesis is in has been a contentious point and new fears were stoked on Nov. 21 when Bloomberg reported the company warned it would be faced with bankruptcy unless provided with additional funding.

    Additionally, while Genesis was significantly affected by FTX’s implosion, the company is allegedly actively looking for solutions that don’t include its filing for bankruptcy.

    In his letter, Stilbert also stated that: “this is an issue of liquidity and duration mismatch in the Genesis loan book”, and added, “Importantly, these issues have no impact on Genesis’ spot and derivatives trading or custody businesses, which continue to operate as usual.”

    “We have no plans to file bankruptcy imminently. Our goal is to resolve the current situation consensually without the need for any bankruptcy filing,” the firm told Reuters in an emailed statement, adding it continues to have conversations with creditors.

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