Cryptocurrency lending firm Genesis Global Capital has reportedly asked crypto exchange Binance and private equity firm Apollo Global Management for cash. Genesis is faltering as the FTX contagion continues to spread throughout the cryptocurrency world.
The Wall Street Journal reports that Genesis Global Capital is seeking funding to stay afloat. According to people familiar with the matter, the lender has asked crypto exchange Binance for an investment and bid for its loan book.
According to people familiar with the matter, Binance decided not to invest in Genesis because it was concerned that some of the firm’s future business could create a conflict of interest. Genesis also reportedly approached Apollo Global Management for capital assistance.
A Genesis spokesperson said: “We have no plans to file bankruptcy imminently. Our goal is to resolve the current situation consensually without the need for any bankruptcy filing. Genesis continues to have constructive conversations with creditors.”
Since the collapse of the popular trading platform FTX, Genesis has seen a major increase in users attempting to withdraw funds from its lending arm. Genesis sought a $1 billion loan from investors before it told clients it was temporarily suspending withdrawals and loan originations in a call on November 16. During the call, Interim CEO Derar Islim stated that the company would publish a plan for its lending business this week.
According to Genesis’ financial statements, the firm had $2.8 billion in active loans as of the end of the third quarter, down from $11.1 billion in that quarter a year earlier when cryptocurrency values soared.
Genesis isn’t the only crypto firm facing troubles following the collapse of FTX. Breitbart News previously reported that BlockFi, a platform for crypto-backed loans and trading, may also be facing bankruptcy due to its exposure to the FTX contagion.
In a blog post, BlockFi admitted to “significant exposure” to FTX and Alameda Research, the crypto exchange and trading company operated by Sam Bankman-Fried, including loans to Alameda. BlockFi also sought to reassure observers that it has the “necessary liquidity to explore all options.”
Read more at the Wall Street Journal here.
Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship. Follow him on Twitter @LucasNolan
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