Cryptocurrency brokerage Genesis is facing the ripple effects of the FTX debacle. After being forced to stop customer withdrawals from its platform last week, the company is reportedly heading toward bankruptcy. People familiar with the matter told Bloomberg that Genesis might have to file for bankruptcy if it fails to raise enough cash to bail itself out of the situation.
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Genesis is still in the process of trying to raise at least $1 billion in fresh capital to address the liquidity crunch as a result of the FTX exchange implosion. To this end, the company approached crypto exchange Binance, which has reportedly declined the proposal. Private equity giant Apollo Global Management (NYSE:APO) has also been approached for financial assistance.
A spokesperson for Genesis commented that the company is still in “constructive conversations with creditors” and looking to settle the situation without having to file for bankruptcy.
The problems of cryptocurrency investors do not appear to be over. The situation with Genesis underscores the ripple effects of the FTX crash that are starting to affect crypto-focused companies. The news led to a sustained slump in Bitcoin (BTC-USD) prices during Monday’s regular trading hours.
Is Bitcoin a Good Stock to Buy?
Transactions on the Bitcoin network and signals from exchanges and derivatives (which include signals from Bitcoin futures price, volume, and open interest) indicate an overall bearish outlook for the cryptocurrency.
