- Genesis has warned prospective investors that they may have to file for bankruptcy if they can't get financing for its loans, Bloomberg reports.
- Crypto brokers are seeking at least $1 billion in fresh capital, the report said, citing unnamed sources.
- "We have no immediate plans to file for bankruptcy," a Genesis spokesperson told Bloomberg.
Genesis has warned potential investors that they may have to file for bankruptcy if it doesn't get new funding for its lending arm, Bloomberg reported Tuesday.
One of the largest cryptocurrency brokerages for institutional investors, Genesis, has sought at least $1 billion in new capital in recent days, according to a report citing sources familiar with the matter.
The report said there are talks with cryptocurrency exchange Binance about a potential investment, but no funding has been made yet. Genesis has approached Apollo Global Management to secure the investment, but the private equity firm is unlikely to commit to the deal, according to Bloomberg.
"We have no immediate plans to file for bankruptcy," a Genesis spokesperson told Bloomberg in an emailed statement. "Our goal is to resolve the current situation amicably without the need to file for bankruptcy. Genesis continues to engage in constructive discussions with creditors."
Genesis' rush to raise funds was driven by liquidity constraints in its lending arm following the collapse of cryptocurrency exchange FTX. Genesis halted purchases on Nov. 10 shortly after discovering it had locked up $175 million in its FTX trading account.
FTX, once valued at $32 trillion, tumbled this month amid questions about whether founder Sam Bankman-Fried mishandled client funds, and its failures reverberated throughout the cryptocurrency industry. On Tuesday, FTX's new management team will make its first appearance in a Delaware court seeking bankruptcy protection.
Bitcoin, the world's most traded cryptocurrency, rose 1.5% to $16,022 on Tuesday, but has lost about 65% of its value in 2022 as part of a digital asset called crypto winter.