The fall of the crypto exchange FTX caused a lot of financial problems for many other companies, including the loan platform Genesis. The company was forced to pause recordings to avoid a kind of bank run. There are rumors that bankruptcy is already around the corner, but Genesis denies this.
‘No plans for bankruptcy’
Genesis does have financial problems and without support they don’t seem to be solved just like that. The company, according to sources from Bloomberg struggling to raise money for loans. Investors would have been informed that it will soon have to file for bankruptcy.
But a spokesman for Genesis explains Cointelegraph that this is not true, and that without bankruptcy the company is looking for a way out of the plight. This would mean ‘constructive talks’ with creditors. Genesis is therefore short of money, but apparently there is no question of bankruptcy yet.
Genesis was for institutions
FTX was one of the largest crypto exchanges in the world, and the fall had huge consequences. About 130 related companies were also forced to file for bankruptcy. Genesis was just one of these. With the crash of the Terra (LUNA) ecosystem, we saw how long it can take for all the chaos to be resolved. So it could be that the disorder that FTX has caused is not over yet.
Genesis focuses specifically on institutional investors. It mediates between two parties who want to take crypto loans with each other. In addition, it is also one marketmakera derivatives platform and a custodian for institutes. Previous bankruptcies mainly related to companies that target retail investors, but institutions are now also being affected.
An important detail is that the exchange Gemini had exposure to Genesis, through Gemini Earn. The exchange allowed customers to stake their coins by channeling them to Genesis, allowing you to earn up to 8.05% on your crypto as a customer at Gemini. So it could be that Gemini is also in trouble. Genesis also falls under the Digital Currency Group (DCG), owner of Grayscale, which manages the largest bitcoin fund in the world.