Last year was tough on Genesis. The collapse of Three Arrows Capital (3AC), FTX, and other large crypto companies drew the whole market with it. This also applies to firms with exposure to them, such as Genesis.
Genesis in trouble
Genesis Global Capital, the institutional cryptocurrency brokerage whose lending unit stopped customer withdrawals after FTX failed, is getting ready to file for bankruptcy. Genesis is rumoured to be in secret talks with different creditor groups.
Related article: Ukraine wants to become the leading jurisdiction for digital assets
The company has warned that it could file for bankruptcy if it can’t raise money. Raising money, however, is more difficult in these times than ever before. In 2022, Genesis’ $2.4 billion loan to the hedge fund 3AC basically disappeared because 3AC went bankrupt as it had large exposure to Terra Luna.
This ripple effect is tearing the largest crypto companies in the space apart and seems to have no end. When FTX went bankrupt back in November, Genesis was left racing to find new funding. As a result of the FTX collapse, the company’s institutional lending division had to halt its operations.
Markets are already in a very bad condition with many bankrupt billion-dollar companies like Terra Luna, 3AC, Voyager Digital, Celsius Network, FTX, etc. If no funding is found by Genesis, it can join other failed unicorns.