Genesis hires a bankruptcy prevention specialist

Recent reports say that Genesis Global Capital has retained a restructuring attorney to look at all possible outcomes, including but not limited to the possibility of filing for bankruptcy.

According to a report in the New York Times on November 22, the company is known to have hired investment banking firm Moelis & Company to investigate possible courses of action. However, people familiar with the situation have stressed that no financial decisions have been made and the company may still avoid filing for bankruptcy.
It is interesting to note that Moelis & Company was also one of the companies contracted by Voyager Digital after the company temporarily halted withdrawals and deposits on July 1 to investigate “strategic alternatives.”
A few days later, Voyager Digital filed for Chapter 11 bankruptcy with the Southern District of New York. This was part of a plan to restructure the company so that customers would get their money back.
But a Genesis spokeswoman said not long ago that the company had no “imminent” plans to file for bankruptcy, despite a Nov. 21 Bloomberg article to the contrary.

“Genesis maintains a positive and productive dialogue with its creditors,” the representative said.
People say Genesis is trying to get between $500 million and $1 billion from investors to fill a gap caused by “unprecedented market turbulence” and the failure of cryptocurrency exchange FTX.
According to a report published by Bloomberg on November 22, the financially troubled loan company has outstanding loans totaling $2.8 billion on its balance sheet. Approximately thirty percent of the company’s loans have been made to “related parties,” which include both its parent company, Digital Currency Group, and its subsidiary and lending unit, Genesis Global Trading.
In a letter that has been circulating lately, Digital Currency Group CEO Barry Silbert claims that the company owes Genesis Global Capital $575 million and that payment is due in May 2023.
Since the FTX exchange closed on November 11, all attention has been focused on Genesis, Grayscale Investments and their parent company, Digital Currency Group. People fear that these companies could be the next exchanges to fail due to the spread.
Over the past week, the three corporations have worked hard to allay their investors’ concerns.
In a tweet sent out on November 17, Grayscale Investments aimed to reassure investors by stating that “the security of holdings underlying Grayscale’s digital asset products are not affected.” The tweet referred to the suspension of withdrawals implemented by Genesis Global Trading, adding that the company’s products continue to function as normal.
Meanwhile, Digital Currency Group CEO Barry Silbert’s most recent letter to investors eased investor concerns by telling them the company is on track to generate $800 million in sales by 2022.

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