While the entire crypto ecosystem is being shaken up by the FTX and SBF affair, it seems that the turn of other crypto agencies and entities. Bloomberg reported that Genesis, a collateral victim of FTX, is at an extremely high risk of bankruptcy.
Worse and worse since the beginning of the month
A few days after the collapse of FTX, Genesis spoke of bankruptcy as one possible option when seeking funding, Bloomberg reports:
The reports from the crypto broker have been appearing for several days Genesis are disturbing:
- November 8: No significant net credit exposure“.
- November 9: “We have lost 7 million dollars. »
- November 10: “We have $175 million locked in FTX. »
- November 16: “We have blocked recordings and new loans. »
- November 17: “We need $1 billion”
- November 21: “We will go bankrupt without that money.”
This cascade of bad news impacted the crypto market, specifically a new low on Bitcoin from exactly two years ago: it hit $15,500.
Nevertheless, the price rose slightly after Bloomberg reported from Genesis: “We don’t plan on filing for bankruptcy any time soon.”
Fundraiser that got no response
As Genesis goes bankrupt without funding, the request has been cut in half, from $1 billion to $500 million:
Binance will not help Genesis
According to the Wall Street Journal, the report says Genesis has applied for funding to Binance and Apollo Global Management to make ends meet.
Binance declined the requestrelinquishing to help Genesis, and it finds itself with the same problem: a critical lack of funds, which could lead to bankruptcy:
“We do not plan to file for bankruptcy any time soon. Our goal is to resolve the current situation in a consensual manner without filing for bankruptcy. Genesis continues to engage in constructive discussions with creditors. »
Genesis representative at Bloomberg
Genesis can take out Grayscale with it
The crypto broker can train other entities, including Grayscale.
Grayscale Investments, which manages GBTC, and Genesis are both owned by Digital Currency Group (DCG), as is CoinDesk.
GBTC is the largest Bitcoin investment fund and holds over $10.5 billion in BTC. DCG and its subsidiaries own approximately 10% of GBTC. A bankruptcy of Genesis is therefore likely to have dramatic consequences for Grayscale.
Pending whether Genesis manages to raise the funds needed not to sink, i.e. “only” $500 million, the ecosystem frequented by the Grayscale juggernaut appears to be fragile. If the crypto broker files for bankruptcy, the crypto market will again experience a very large drop… although we seem to be getting used to it. Stradoji will of course keep you informed of the developments in this case.
You want to understand cryptos for dig up nuggets and to be able to invest in a safe way? Sign up for our Crypto Rider training to help you strategize and make money:
