Genesis rumored to be preparing bankruptcy filing as soon as next week – Crypto News – Crypto News
Connect with us
Genesis rumored to be preparing bankruptcy filing as soon as next week Genesis rumored to be preparing bankruptcy filing as soon as next week

Cryptocurrency

Genesis rumored to be preparing bankruptcy filing as soon as next week – Crypto News

Published

3 years ago

on

Haru Invest

Genesis Trading, the institutional trading platform owned by Digital Currency Group, is reportedly preparing a “prepackaged” bankruptcy filing with creditors.

Source told The Block that negotiations were underway between Genesis and its creditors to establish a framework for a bankruptcy filing which could come as soon as next week. “Creditors would agree to a forbearance period between one and two years,” which could include equity in DCG, as stated in the report.

Genesis’ troubles were made public at the end of last year following the collapse of FTX. It was disclosed that Genesis had a $3B hole in its balance sheet that it could not fill and DCG could not solve.

On Jan. 4, Genesis interim CEO Derar Islim said the company needed more time to solve its financial problems. Islim explained, “We remain focused on finding a solution for our borrowing and lending intermediation business and reaching the best outcome for all affected clients.”

However, since then, The Wall Street Journal Reported that the company had laid off 30% of its staff and that bankruptcy was on the cards.

The company is fighting on multiple fronts as Gemini and the SEC are also pushing for answers. For example, Gemini Earn customers claimed Genesis owes them $900 million, while the SEC is also investigating Genesis over the matter.

Genesis hired investment bank Morelis in November to help clarify its financial position. The company has historically provided restructuring services. However, the last client listed for this service on its website was in 2016. Morelis specializes in acquisitions, mergers, and capital structure advisory, which ties in with the rumors of a prepackaged bankruptcy filing.

Filing for bankruptcy after creditors have already been involved in negotiations can reduce the time taken to complete the process and for creditors to receive funds.

However, the SEC investigation could complicate the proceedings depending on its required level of due diligence.

Posted In: bankruptcy, Rumors

Read Our Latest Market Reports

Related Topics:
Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Trending