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HomeBankruptcyCrypto Brokerage Genesis Needs $500 Million In Funding!

Crypto Brokerage Genesis Needs $500 Million In Funding!

Broker Genesis is struggling to raise fresh money for its credit division and is warning potential investors that the company may have to file for bankruptcy if its efforts fail, according to people familiar with the matter.

“We have no plans to file bankruptcy imminently,” a Genesis spokesperson said in an emailed statement to TechCrunch on Monday. “Our goal is to resolve the current situation consensually without the need for any bankruptcy filing. Genesis continues to have constructive conversations with creditors.”

According to The Block, sources shared that Genesis cut its capital raise target 50% from $1 billion to $500 million, as it may face bankruptcy without the funding.

Genesis faced a liquidity crisis following the collapse of FTX, which “caused unprecedented market turmoil resulting in abnormal withdrawal requests that exceeded our current liquidity,” the company announced in a series of tweets last Wednesday. The company decided to “temporarily suspend withdrawals and new loan originations in the lending business.” The suspension has not been lifted since.

Genesis launched in 2018 and grew quickly, offering low-interest loans to institutional investors to facilitate crypto trading. Borrowers took advantage of the low-cost loans, and Genesis reported $50 billion in outstanding loans at its peak.

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