Genesis Capital is trying to avoid bankruptcy by relying on a restructuring advisor


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The lender associated with Bitcoin (BTC) and cryptocurrencies, Genesis Capital, will work out options to avoid declaring bankruptcy. For this purpose, they were going to hire a restructuring consultant, The New York Times (NYT) reported on Tuesday.

According to this medium, Genesis Global Capital relied on investment bank Moelis & Company. This company will be responsible for Evaluate the different options that the company has in facing the crisis which has been going on since the collapse of the bitcoin exchange, FTX, leaving millions of dollars in losses.

Genesis Capital and Moelis & Company will determine the best way forward amid financial difficulties. And while it is true that they will avoid bankruptcy, The company does not rule out declaring bankruptcyjust like it did with FTX two weeks ago.

Genesis Capital previously reported that it had engaged the services of advisory firm Álvarez & Marsal, as well as law firm Cleary Gottlieb, specifically to try to deal with its liquidity crunch.

Just this week, Álvarez & Marsal released financials for FTX. According to this company, the exchange It only has $1.2 billion in cash reserveswhich is far less than what they need to pay their 50 principal creditors, CriptoNoticias reported.

Resolve the situation without having to declare bankruptcy

According to a Genesis Capital spokesperson quoted by the New York Times, with the union with Moelis & Company they propose to “resolve the current situation without having to declare bankruptcy.” This, considering that the lender, which is owned by Digital Currency Group, is facing days of intense stress following the collapse of FTX.

Note that Genesis has significant exposure to FTX. As reported a few days ago, this company You have at least $175 million in reserved fundss in the exchange room has already collapsed, a fact reported by CriptoNoticias.

The contract with Moelis & Company is known at a time when the term for obtaining the necessary financing and avoiding bankruptcy was getting shorter and shorter for Genesis Capital.

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As reported by this outlet on Tuesday afternoon, Genesis Capital has not been lucky enough to have the funds needed to avoid bankruptcy. However, they are seeking to resolve this situation without having to comply with Chapter 11 of the United States Bankruptcy Code.

Moelis & Company has already been involved in cases similar to that of Genesis Capital. in July, This company advised Voyager Digitalanother bitcoin-related lender, fell out of favor, also filed for bankruptcy.

With Genesis Capital, there are already many companies that have suffered the downfall of FTX. One can cite, for example, from Grayscale and Foundry, Companies that announced losses due to their exposure to the collapsing stock market.

FTX, which has become one of the most important cryptocurrency exchanges in the market, fell into a catastrophe and declared bankruptcy in less than a week. The crisis was triggered by an investigation by CoinDesk, which concluded that that company’s — already crippled — CEO had I used the exchange code FTT as collateral for the loans.

The situation escalated when allegations surfaced that Sam Bankman-Fried used FTX users’ money to fund his other company, Alameda Research. Because of this whole situation, there is now a series of investigations going on.

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