Consensual Resolution: The Plan Genesis Seeks to Avoid Insolvency

Genesis, a digital asset financial services firm, has denied that it is on the verge of bankruptcy, just days after halting withdrawals in response to the collapse of crypto exchange FTX.

The cryptocurrency lender stated on Monday (November 21) that it has "no plans" to file for bankruptcy in the near future and will seek a "consensual" resolution to the situation.

A Genesis spokesperson told Reuters in an emailed statement:

“We have no plans to file bankruptcy imminently. Our goal is to resolve the current situation consensually without the need for any bankruptcy filing.”

According to Bloomberg News, which cited sources, Genesis was having difficulty raising new capital for its lending unit and had warned investors that if additional funding was not secured, the company would file for bankruptcy.

Reports have pointed that the crypto investment bank has been attempting to raise at least $1 billion in new capital over the last several days.

Furthermore, according to the Wall Street Journal, Genesis approached cryptocurrency exchange Binance in search of an investment, but Binance declined due to a potential conflict of interest down the road. The company also sought funding from private equity firm Apollo Global Management.

Last week, Genesis Global Capital, one of the largest crypto lenders, suspended customer withdrawals due to a liquidity shortage caused by an increase in withdrawal requests following the collapse of Sam Bankman-Fried's FTX.

Gemini's Position

Gemini, which operates a crypto lending product in collaboration with Genesis, announced on Monday that it would continue to work with the company to help its customers redeem funds from its yield-generating "Earn" program.

Last week, Gemini stated on its blog that the suspension of Genesis withdrawals had no impact on its other products or services.