U.S. crypto broker Genesis says it is working to avoid bankruptcy filing

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 escape 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 legal firms in an effort to avert a scenario resembling the swift bankruptcy of cryptocurrency exchange FTX.

A Genesis spokeswoman stated, "Our goal is to fix the current lending business position without the necessity for any bankruptcy petition."

Requests for comment from Proskauer and K&E representatives were not immediately fulfilled.

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 recruited investment bank Moelis & Company "to examine the best potential asset preservation strategy and execute a roadmap."

The sudden demise of FTX, where its derivatives business has around $175 million in locked assets, led Genesis Trading's crypto lending division to restrict customer redemptions earlier this month, the company had claimed.

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.