Nov 29 (Reuters) – US cryptocurrency broker Genesis said it is seeking to avoid bankruptcy after Bloomberg news reported on Tuesday that creditors for the firm are managing with lawyers to restructure to prevent insolvency.
Citing people with knowledge of the situation, the the report said law firms Proskauer Rose and Kirkland & Ellis are being consulted by a group of creditors, who seek to avoid a similar situation with crypto exchanges. FTX is rapidly descending into bankruptcy.
“Our goal is to resolve the current situation in the lending business without requiring a bankruptcy filing,” a Genesis spokesperson said.
Representatives for Proskauer and K&E did not immediately respond to requests for comment.
“We have started discussions with potential investors and the largest lenders and borrowers, including Gemini and DCG, to agree on a solution that supports the overall liquidity of our credit business and meets the needs of our clients,” said Genesis interim executive chairman Derar Islim. client in the letter seen by Reuters.
The report comes as U.S. state securities regulators are investigating Genesis Global Capital as part of a wide-ranging investigation into the crypto firm’s alleged ties to, Barron’s reported last weekstated the comments of the director of the Alabama Securities Commission.
Genesis has hired investment bank Moelis & Company “to evaluate the best asset preservation strategy and implement a roadmap,” the company said in the letter.
The crypto credit arm of US digital asset broker Genesis Trading suspended customer redemptions earlier this month, due to the sudden failure of FTX, where the derivatives business had about $175 million of funds locked up, the company said.
Venture capital firm Digital Currency Groupowner of Genesis Trading and cryptocurrency asset manager Grayscale, owes $575 million to Genesis’ crypto lending arm, Digital Currency Chief Executive Barry Silbert told shareholders this month.
Reporting by Bharat Govind Gautam and additional reporting by Jaiveer Shekhawat in Bengaluru; Edited by Cynthia Osterman
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