WSJ: Genesis, one of the largest cryptocurrency lenders, is close to bankruptcy
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The management of the cryptocurrency company Genesis Global Trading has announced a reduction of 30% of employees and is considering filing for bankruptcy. This is reported with reference to its own sources in one of the largest cryptocurrency lenders in the world. The Wall Street Journal.
Reductions have affected all departments of the company, the newspaper specifies. In total, about 60 people were fired on Thursday. Now Genesis employs just 145 people.
The company has been experiencing serious problems since the middle of last year. The first blow to the financial stability of Genesis was bankruptcy cryptocurrency hedge fund Three Arrows Capital. Genesis once issued a loan of $2.4 billion to him. And a month after the bankruptcy announcement of Three Arrows, Genesis management announced a reduction of 20% of its employees. The second serious blow to the cryptocurrency lender was bankruptcy FTX and Alameda Research last November. According to WSJ sources, Genesis issued loans to Alameda for “at least hundreds of millions of dollars.”
Just a few days after the collapse of the FTX Group, Genesis management announced the suspension of the issuance and repayment of loans. According to the WSJ, at the same time the company turned to the investment bank Moelis & Co., as well as consulting companies Proskauer Rose and Kirkland & Ellis, in an attempt to find a way to avoid bankruptcy. Among other things, Genesis was looking for new investors willing to invest about $1 billion in the company. However, according to WSJ sources, Genesis and Moelis are now considering filing under Article 11 of the US Bankruptcy Code. This article provides for the provision of temporary protection from creditors in order to enable the company to continue functioning.
Read more about the situation with FTX in the material “Cryptocurrency did not go to American politicians”.
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