Genesis Global Capital is navigating a precarious financial situation, with imminent bankruptcy as a likely outcome if it does not secure the liquidity needed to stay afloat.
Bitcoin, the largest cryptocurrency, is trading on the read as the crypto sector faces another high-profile bankruptcy.
Amid mounting pressure and amid protracted confidential negotiations with creditors, cryptocurrency lending giant Genesis Global Capital is reportedly preparing for a possible bankruptcy filing, according to a Bloomberg report.
According to sources familiar with the matter, the subsidiary of Barry Silbert’s Digital Currency Group (DCG) has informed creditor groups that it must raise funds urgently in order to avoid such a scenario. However, a bankruptcy filing appears imminent at this point, according to the report.
The talks between the DCG and the creditors have not yet resulted in substantial progress. It is understood that major Wall Street law firms such as Kirkland & Ellis and Proskauer Rose are currently consulting with creditors. Representatives for DCG and Genesis Global Capital are not responding to requests for comment.
Genesis has come under intense scrutiny after it abruptly suspended withdrawals on November 16. This happened almost immediately after crypto exchange FTX filed for bankruptcy earlier this month.
The shockwaves quickly spread throughout the crypto industry, affecting the Gemini exchange, which is led by Cameron and Tyler Winklevoss. Gemini had to shut down its Gemini Earn program as creditors could not receive their money. The issue was the subject of a public spat between the Winklevoss and Silbert twins.