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US crypto broker Genesis says it is working to avoid bankruptcy filing By Reuters

© Reuters. FILE PHOTO: Depictions of virtual cryptocurrencies are placed on US dollar banknotes in this illustration taken November 28, 2021. REUTERS/Dado Ruvic/Illustration/File Photo

(Reuters) – U.S. cryptocurrency brokerage Genesis said it was seeking to avoid bankruptcy after Bloomberg reported on Tuesday that the firm’s creditors were arranging with restructuring lawyers to avoid insolvency .

Citing people with knowledge of the situation, the report says law firms Proskauer Rose and Kirkland & Ellis are being consulted by creditor groups, seeking to avoid a situation similar to the rapid fall of crypto exchange FTX in the US. bankruptcy.

“Our goal is to resolve the current situation in the lending industry without the need to file for bankruptcy,” a Genesis spokesperson said.

Representatives for Proskauer and K&E did not immediately respond to requests for comment.

“We have entered into discussions with potential investors and our major creditors and borrowers, including Gemini and DCG, to agree on a solution that strengthens the overall liquidity of our lending business and meets customer needs,” said the Acting CEO of Genesis, Derar Islam. customers in a letter seen by Reuters.

The report comes as U.S. state securities regulators probe Genesis Global Capital as part of a sweeping probe into the interconnectedness of crypto firms, Barron reported last week, citing a comment from the Alabama director Securities Commission.

Genesis engaged investment bank Moelis (NYSE:) & Company “to assess the best possible asset preservation strategy and establish a roadmap,” the company said in the letter.

The crypto lending arm of US digital asset broker Genesis Trading suspended client redemptions earlier this month, citing the sudden failure of FTX, where its derivatives business has around $175 million in worth. locked funds, the company had said.

Venture capital firm Digital Currency Group, which owns Genesis Trading and cryptocurrency asset manager Grayscale, owes $575 million to Genesis’ crypto lending arm, Digital Currency’s chief executive said, Barry Silbert, to shareholders this month.

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