The currency storm caused by the bankruptcy of the cryptocurrency exchange FTX continues to spread. Citing people familiar with the matter, Bloomberg reported that Genesis, an affected cryptocurrency broker, warned investors that the company may file for bankruptcy if it cannot raise funds.
After the news came out, Bitcoin fell below the $16,000 mark again, and the price of the currency plummeted to $15,615, the lowest level since November 2020. At press time, Bitcoin was trading at $15,807.81, down 23.2% over the past two weeks.
Genesis, which had initially announced on Nov. 16 that its lending arm was suspending customer fund redemptions and new loan originations , had been seeking a $1 billion loan for the past few days after FTX filed for Chapter 11 bankruptcy, creating a liquidity gap for Genesis . Emergency financing credit .
However, sources obtained by The Block indicate that Genesis’ funding target has been reduced from $1 billion to $500 million, adding that Genesis parent company Digital Currency Group (DCG) is reluctant to sell part of its venture It does not plan to sell its money-making tool – Grayscale (Grayscale).
In response, Genesis said in a statement that the company has no “immediate” plans to file for bankruptcy and is working to resolve the current situation.
According to the “Wall Street Journal” report, Genesis had contacted the cryptocurrency exchange Binance and the private equity fund Apollo Global Management (Apollo Global Management) in an attempt to obtain capital injection, but people familiar with the matter said that due to concerns that some of Genesis‘ business follow-up may A conflict of interest would arise, and Binance ultimately decided not to invest.
Although the fuse that caused Genesis to fall into trouble was FTX’s application for bankruptcy protection , in fact, as early as July this year, when Three Arrows Capital filed for bankruptcy protection, it dealt a major blow to Genesis. According to court documents , Genesis had provided loans to Three Arrows Capital24 billion, and subsequently filed a claim for US$1.2 billion against it.
