Genesis Trading is facing a liquidity crisis following the FTX affair, which puts it at risk of bankruptcy. As the company seeks new funding, Binance has reportedly refused to take part in a possible funding round.
Genesis Trading seeks to raise funds to avoid bankruptcy
According to our colleagues at Bloomberg, over-the-counter (OTC) cryptocurrency trading specialist Genesis Trading, has raised the alarm about potential bankruptcy. Indeed, the company is currently looking for new financing following a shortage of liquidity caused by the FTX affair.
Initially, Genesis Trading informed that FTX’s difficulties did not impact its activitiesbut very quickly, she qualified her remarks by revealing that 175 million dollars were blocked on the exchange.
Then on November 16, the company acknowledged that market volatility ultimately had an impact on his business. Although OTC trading remains operational, Genesis has chosen to temporarily suspend its lending services in the face of current market tensions:
We recognize how challenging this past week has been due to the impact of the FTX news. At Genesis we are entirely focused on doing everything we can to serve our clients and navigate this difficult market environment.
— Genesis (@GenesisTrading) November 16, 2022
In a statement to our colleagues at the Wall Street Journal, a spokesperson for Genesis, however, held to relativize the risk of bankruptcyinsisting that it was not yet on the agenda:
“We do not intend to file for bankruptcy any time soon. Our goal is to resolve the current situation in a consensual manner without the need for a bankruptcy filing. Genesis continues to have constructive conversations with creditors. »
👉 To go further – Find our tutorial on dYdX, the decentralized trading platform
Trade on the leading DEX
⛓️ A platform at the heart of DeFi
Binance will not provide support
It is difficult to get a precise idea about the situation of Genesis Trading. Indeed, while the company minimized the situation from the startthe following communications did indeed showed difficulties. If there is no question of questioning the word of the company, remember that FTX also sought, at first, to reassure on its situation.
The fact is that today Genesis Trading seeks to raise funds. If the primary goal was $1 billion, it would appear those ambitions would have been whittled down to $500 million, as sources familiar with the matter told The Block.
Regarding this operation, Binance did not wish to take part in any round table to refinance Genesis, despite the recent announcement of its relief fund intended for players in the ecosystem in difficulty. Thus, the exchange would have argued that such an investment could have led to conflicts of interest in the futurethus wishing to stay away.
The next days will therefore be decisive for this institutional actor that is Genesis Trading, if he wants to avoid joining the list of collateral damage of the FTX affair.
👉 Follow the FTX affair and its fallout live
Join Experts and a Premium Community
PRO
Invest in your crypto knowledge for the next bullrun
Sources: Bloomberg, The Wall Street Journal, The Block
Newsletter 🍞
Receive a summary of crypto news every Monday by email đź‘Ś
What you need to know about affiliate links. This page presents assets, products or services relating to investments. Some links in this article are affiliated. This means that if you buy a product or register on a site from this article, our partner pays us a commission. This allows us to continue to offer you original and useful content. There is no impact on you and you can even get a bonus by using our links.
Investments in cryptocurrencies are risky. Cryptoast is not responsible for the quality of the products or services presented on this page and could not be held responsible, directly or indirectly, for any damage or loss caused following the use of a good or service highlighted in this article. Investments related to crypto-assets are risky by nature, readers should do their own research before taking any action and only invest within the limits of their financial capabilities. This article does not constitute investment advice.
AMF recommendations. There is no guaranteed high return, a product with high return potential involves high risk. This risk-taking must be in line with your project, your investment horizon and your ability to lose part of this savings. Do not invest if you are not ready to lose all or part of your capital.
To go further, read our Financial Situation, Media Transparency and Legal Notices pages.