Days after being forced to halt client redemptions due to the collapse of cryptocurrency exchange FTX, cryptocurrency lender Genesis said on Monday that it had no imminent intentions to declare bankruptcy.
“We don’t have any immediate intentions to declare bankruptcy. Our purpose is to reach a mutually agreeable resolution to the current situation without declaring bankruptcy, “Genesis continues to speak with creditors, a spokesman for the company said in an email statement to Reuters.
According to a Bloomberg News story quoting sources, Genesis is having trouble finding new money for its loan division and has warned investors that if funding cannot be found, it may have to declare bankruptcy.
Additionally, according to sources cited by the Wall Street Journal, the business approached cryptocurrency exchange Binance in an effort to get an investment, but Binance declined out of concern for a potential conflict of interest.
Gemini, a cryptocurrency exchange that collaborates with Genesis to offer a crypto loan product, tweeted on Monday that it was still working with Genesis to make it possible for its users to withdraw money from the latter’s yield-generating “Earn” program.
Gemini claimed last week on its blog that the suspension of Genesis withdrawals had no effect on any of its other products or services. The Wall Street Journal reported Thursday that Genesis had asked investors for a $1 billion emergency loan before it halted withdrawals.
In the highest-profile crypto meltdown to date, FTX filed for US bankruptcy protection earlier this month after traders withdrew billions from the platform in just three days and rival exchange Binance abandoned a rescue arrangement. As stated in the article, Genesis also requested cash help from Apollo Global Management, a private equity firm.
Apollo and Binance both declined to comment when Reuters reached out to them for a response to the WSJ article. Genesis Global Capital cited the abrupt failure of Sam Bankman-cryptocurrency Fried’s exchange FTX as the reason for the suspension of client redemptions in its lending company last week.