Genesis, a U.S. crypto dealer, claims it is attempting to avoid declaring bankruptcy

Genesis, a U.S. cryptocurrency brokerage, announced on Tuesday that it was attempting to escape bankruptcy after Bloomberg News reported on Tuesday that the company's creditors were banding together with restructuring attorneys to avoid bankruptcy.

Genesis, a U.S. cryptocurrency brokerage, announced on Tuesday that it was attempting to avoid bankruptcy after Bloomberg News reported on Tuesday that the company’s creditors were banding together with restructuring attorneys to avoid bankruptcy.

According to a report citing sources with knowledge of the matter, creditor groups are seeking advice from Proskauer Rose and Kirkland & Ellis law firms in an effort to avoid a scenario resembling the swift bankruptcy of cryptocurrency exchange FTX.

A Genesis spokesperson stated, “Our goal is to resolve the current lending business situation without the need for any bankruptcy filing.”

Derar Islim, interim chief executive of Genesis, wrote in a letter to clients that “we have started discussions with potential investors and our largest creditors and borrowers, including Gemini and DCG, to agree on a solution that shores up our lending business’ overall liquidity and addresses clients’ needs.”

According to a report from Barron’s last week, which was based on a statement from the director of the Alabama Securities Commission, the report comes as state securities regulators in the United States are looking into Genesis Global Capital as part of a broad investigation into the connections among cryptocurrency firms.

According to the firm’s letter, Genesis has hired investment bank Moelis & Company “to evaluate the best possible asset preservation strategy and effectuate a roadmap.”

The sudden failure of FTX, where its derivatives business has approximately $175 million in locked funds, led Genesis Trading’s crypto lending division to suspend customer redemptions earlier this month, the company had said.

Barry Silbert, the chief executive of venture capital firm Digital Currency Group, informed shareholders this month that Genesis Trading and cryptocurrency asset manager Grayscale owe $575 million to Genesis’ crypto lending division.

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