Genesis prepares for bankruptcy filing: news | coindesk JAPAN | coin desk Japan

Cryptocurrency broker Genesis Global Capital is preparing to file for bankruptcy (Chapter 11), whose lending arm has suspended withdrawals in the aftermath of the FTX bankruptcy. Bloomberg reported.

Genesis is in behind-the-scenes discussions with various creditor groups, the people said. The company has already warned investors that it could file for bankruptcy if it fails to raise capital.

Cryptocurrency media outlet The Block reported that Genesis is in talks with creditors about pre-adjusted bankruptcy Chapter 11. This means that the two sides will reach an agreement on restructuring before any application is made.

Since the collapse of the cryptocurrency exchange FTX in November, Genesis has been busy raising new capital and dealings with creditors. The company’s institutional lending arm was forced to suspend client withdrawals and new loans. In addition, parent company Digital Currency Group (DCG) is under pressure to secure $900 million in deposits. Genesis reached out to investment bank Moelis & Company late last year to help weigh its options.

DCG is also the parent company of CoinDesk.

In early 2022, following the collapse of the Terra network, hedge fund Three Arrows Capital went bankrupt. A $2.4 billion Genesis loan to Three Arrows has been irrecoverable.

｜Translation: coindesk JAPAN
｜Editing: Takayuki Masuda
｜Image: Modified by CoinDesk
｜Original: Crypto Brokerage Genesis Global Capital May Be Nearing Bankruptcy Filing: Reports