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Genesis Global Capital, a major crypto investment firm, has called in restructuring experts to avoid bankruptcy. The company has been struggling to keep up with the volatile crypto market, and recent missteps have put it on the brink of collapse. Genesis is not the only firm to experience these struggles, but its high-profile nature has caught the attention of industry analysts. Some are speculating that this could be a sign of things to come for the crypto world as a whole.
Moelis & Company
Embattled cryptocurrency firm Genesis Global Capital has hired investment bank Moelis & Company to explore options for avoiding bankruptcy. The move comes as the company faces mounting financial woes, including over $530 million in outstanding loans and a sharp decline in crypto asset prices. restructuring crypto.
While it is unclear what specific options are being considered, restructuring or selling key assets are likely possibilities. Such a move would be aimed at reducing debt and providing fresh capital to help the company weather the current market conditions. However, it remains to be seen if any such measures will be successful in avoiding bankruptcy. Time will tell whether Genesis Global Capital can find a way to survive the current crisis. Either way, the company’s troubles are a sign of just how difficult the cryptocurrency market has become in recent months.
How did Genesis enter fear of Bankruptcy?
It is believed that Genesis is seeking between $500 million and $1 billion from investors to help hide a deficit caused by “unprecedented market turmoil” and the collapse of crypto exchange FTX. According to Bloomberg, the unsettled lending firm has $2.8 billion in existing loans on its balance sheet, with approximately 30% of its lending made to “related parties” such as its parent company Digital Currency Group and its affiliate and lending unit, Genesis Global Trading. Genesis issued a statement Monday saying “we have no plans to file bankruptcy imminently.”
Other Stakeholders to face Contagion?
Since FTX’s downfall on November 11, all eyes have been on Genesis, Grayscale Investments, and their parent company Digital Currency Group, with fears that they will become the next victims of the contagion.
In a tweet, Grayscale Investments reassured investors that “the safety and security of the holdings underlying Grayscale digital asset products are unaffected,” referring to Genesis Global Trading’s withdrawal halt, adding that its products continue to operate normally.
