Genesis Global Trading has reportedly been telling investors that they may need to file for bankruptcy if their attempts to raise at least $1 billion in new capital don’t succeed. The firm revealed their exposure to FTX last week, halting withdrawals from their lending service and acknowledging that their derivatives arm has $175 million in funds locked in the bankrupt exchange.
The Wall Street Journal then reported that Genesis had been seeking a $1 billion emergency loan due to a « liquidity crunch due to certain illiquid assets on its balance sheet ».
The halting of withdrawals from their lending business has already had major downstream impacts, as it is a major partner of other crypto lending services. Gemini and Coinhouse both followed Genesis in suspending withdrawals, as did other firms including Donut and GOPAX.
A Genesis bankruptcy would be a monumental event in crypto, with enormous downstream exposure.
