ccording to a Nov. 22 New York Times report, the company has hired investment bank Moelis & Company to consider alternatives, while individuals familiar with the situation have asserted that no financial choices have been made and that it is still possible for the company to stay solvent.
Interestingly, Moelis & Company was also one of the firms retained by Voyager Digital after it stopped withdrawals and deposits on July 1 to explore strategic alternatives.
Days later, Voyager Digital filed a Chapter 11 bankruptcy petition in the Southern District of New York as part of a proposal that would return back value to customers.
After a Nov. 21 Bloomberg report suggested otherwise, a Genesis spokesperson recently told Cointelegraph that the company had no imminent plans to file for bankruptcy.
"We have no immediate plans to declare bankruptcy." Our goal is to resolve the current situation amicably without the need for bankruptcy. Genesis continues to have constructive discussions with creditors," the spokesperson said.
The November 22 Bloomberg report stated that the lending firm has $2.8 billion in existing loans on its balance sheet, with approximately 30% of its lending made to related parties such as its parent company Digital Currency Group and its affiliate and lending unit, Genesis Global Trading.
According to a recently circulated letter from Digital Currency Group CEO Barry Silbert, the company owes Genesis Global Capital $575 million, which is due in May 2023.
Genesis is believed to be seeking between $500 million and $1 billion from investors to cover a shortfall caused by unprecedented market turmoil and the collapse of the crypto exchange FTX.
Since FTX's downfall on November 11, all eyes have been on Genesis. Grayscale Investments, and their parent company Digital Currency Group, fear they will become the next victims of the contagion. Over the last week, all three companies have attempted to assuage investor concerns.
In a Nov. 17 tweet, Grayscale Investments reassured investors that the safety and security of the holdings underlying Grayscale digital asset product lines are unaffected, referring to Genesis Global Trading's withdrawal halt, adding that its products continue to operate normally.
Notwithstanding the suspension of client transactions in its lending business, Genesis has stated that its spot and derivatives trading and custody businesses stay completely operational.
What do you think about Genesis calling in a restructuring expert to avoid bankruptcy? Let us know your thoughts by sharing this article on social media.