Embattled crypto brokerage provider Genesis Global Capital could be in a deeper financial crisis than reported, as creditor groups in negotiation with Genesis currently account for $1.8 billion of loans.
Genesis’ Debt Grows Above $1.8 Billion
Just days after the Financial Times reported that Genesis failed to repay U.S.-based crypto exchange Gemini around $900 million as a partner in the exchange’s landing program Earn, reports have emerged that the company’s debt volume is up to $1.8 billion.
According to the report, the second group of Genesis creditors represented by law firm Proskauer Rose has presented their loans amounting to $900 million, taking the total debt volume to $1.8 billion.
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The report also suggests that Genesis’ debt volume could grow beyond $1.8 as the loans from a third group represented by law firm Latham & Watkins are yet to be disclosed.
Gemini to Discuss a Solution
In his latest letter to investors, Genesis’ interim chief executive, A. Derar Islim, said that the brokerage firm had “begun discussions with potential investors and our largest creditors and borrowers, including Gemini and DCG.”
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In looking for a solution, Genesis hired investment bank Moelis & Company to explore options, including a potential bankruptcy. The firm is now looking to raise up to $1 billion to provide respite to investors.
On the Flipside
- The struggle of Genesis has attracted the attention of several regulators in the U.S. who are looking into whether the firm violated securities laws.
Why You Should Care
The rising debt claims on Genesis could push the crypto brokerage provider into applying for bankruptcy if there are no respite funds forthcoming.
Read about Genesis’ stance on bankruptcy in:
Genesis Dismisses Bankruptcy Reports, Aims to Seek Compromise
Genesis denies imminent plans to file bankruptcy after halting withdrawals
