Crypto Brokerage Genesis Global Capital May Be Nearing Bankruptcy Filing: Reports

Genesis Global Capital, the institutional crypto brokerage whose lending unit halted customer withdrawals in the aftermath of FTX's failure, is laying the groundwork for a bankruptcy filing, according to reports.

Bloomberg reported Genesis as in confidential negotiations with various creditor groups, with the company warnings it could seek bankruptcy protection if it fails to raise capital.

The Block reported Genesis as in talks with creditors about a prepackaged bankruptcy plan, which would mean the two sides coming to a restructuring agreement prior to any filing, and that deal then being made final in bankruptcy court.

Since the collapse and bankruptcy of crypto exchange FTX in November, Genesis had been scrambling to raise fresh capital or reach a deal with creditors. The company's institutional lending unit had been forced to suspend redemptions and new originations as a result of the FTX implosion, and – along with parent Digital Currency Group (DCG) – had come under increasing pressure to make good on $900 million of locked deposits. Genesis late last year retained investment bank Moelis & Company to assist with exploring options.

DCG is also the parent company of CoinDesk.