Genesis, the crypto brokerage platform that froze withdrawals last week, may go bankrupt if it fails to get new funding from potential investors, according to reports.
According to BNN Bloomberg, Genesis, in the past days, has been trying to raise $1 billion in capital from potential investors.
This justified a Wall Street Journal report from Friday, which claimed the trading firm was unsuccessful in its endeavor.
Genesis had also been in talks with Binance also for a potential investment, but funding is still “yet to materialize.”
“We have no plans to file bankruptcy imminently,” a representative for Genesis said in an emailed statement to Bloomberg. “Our goal is to resolve the current situation consensually without the need for any bankruptcy filing. Genesis continues to have constructive conversations with creditors.”
However, reports have revealed that Binance can’t help Genesis at the moment.
A little recap
Genesis froze redemptions last week after another arm of the company revealed it had lost $175 million being exposed to the FTX Collapse.
Recall that FTX filed for bankruptcy earlier this month when it couldn’t withstand a flood of withdrawal requests made days prior.
FTX now holds a reported shortfall of over $8 billion that it owes to depositors, which include retail clients, institutions, and celebrities.
The FTX saga has made other firms to halt withdrawals as well, including BlockFi and Liquid, with Blockfi close to exploring potential bankruptcy.
The Digital Currency Group (DCG), Genesis’s parent company, supported the broker with $144 million in equity on the day of FTX’s bankruptcy, to help withstand its liquidity trouble.