Genesis fights to avoid bankruptcy; They brought in a restructuring expert
by FARUK IMAMOVIC | VIEW 479
Genesis Global Capital, the credit arm of crypto giant Genesis has reportedly hired a restructuring consultant to explore all possible options to save the business. The company is believed to have hired investment bank Moelis & Company to explore all options to avoid the worst-case scenario - bankruptcy.
“We are aware of how challenging the past week has been due to the impact of the FTX news. At Genesis, we are fully focused on doing everything we can to serve our customers and navigate this difficult market environment,” Genesis said in a Twitter post.
Interestingly, Moelis & Company was also one of the firms Voyager Digital hired after it suspended payments and deposits on July 1 to explore “strategic alternatives”. Just a few days later, the company filed for bankruptcy.
We recognize how challenging this past week has been due to the impact of the FTX news. At Genesis we are entirely focused on doing everything we can to serve our clients and navigate this difficult market environment. — Genesis (@GenesisTrading) November 16, 2022
According to Genesis, it does not plan to file for bankruptcy "immediately".
“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,” said the spokesperson. Genesis is believed to be seeking between $500 million and $1 billion from investors to cover the shortfall that ultimately resulted from “unprecedented market turmoil” and the collapse of crypto exchange FTX.
Without additional funds, the bankruptcy of Genesis is more and more certain The struggling lender is owed $2.8 billion, with about 30 percent of the loans coming from its parent and subsidiaries, including Genesis Global Trading, according to a Bloomberg report published on Nov.
22. Genesis Global Capital owes Digital Currency Group CEO Barry Silbert $575 million, according to a letter released recently. Genesis and Grayscale Investments have been the focus of attention since FTX collapsed on November 11th.
It is becoming increasingly apparent that all three companies could become the next victims despite their efforts to calm investors' fears over the past week. In the meantime, DCG CEO Barry Silbert confirmed to investors that the organization would generate $800 million in revenue in 2022 according to his latest investor letter.
“We have weathered previous crypto winters and while this one may feel more severe, collectively we will come out of it stronger,” said Silbert.