Genesis Global Capital to File for Bankruptcy After Failed Negotiations
• Troubled crypto lending firm Genesis Global Capital is likely to file for bankruptcy this week.
• Negotiations between Genesis and creditors have not been successful and bankruptcy is now being considered.
• Genesis and its creditors are currently negotiating a Chapter 11 bankruptcy plan that could involve a forbearance period of one to two years.
Troubled crypto lending firm Genesis Global Capital, a subsidiary of the Digital Currency Group (DCG), is likely to file for bankruptcy this week. The news comes after long and unsuccessful negotiations between Genesis and its creditors. Sources familiar with the matter said that Genesis might file for Chapter 11 bankruptcy if it is unable to raise cash amid a severe liquidity crunch.
The negotiations between Genesis and creditors have not moved forward as expected, leading to the consideration of bankruptcy. Creditors are now in talks with Genesis and its parent company, DCG, over a bankruptcy plan. The proposed plan involves a forbearance period of one to two years, during which creditors could receive cash and equity from DCG as part of the deal. Furthermore, Genesis has also been looking into various debt restructuring options in an attempt to stave off bankruptcy.
Genesis was founded in 2018 as a crypto lending and borrowing platform. It quickly rose to prominence and was considered to be one of the leading crypto lenders in the industry. However, the company has been struggling due to the prolonged bear market, resulting in a liquidity crunch. This has put a strain on its operations and has made it difficult for the company to pay back its creditors.
The potential bankruptcy of Genesis is a major blow to the crypto lending industry. If the company is unable to pay back its creditors, it could set a dangerous precedent for the industry, further damaging investor confidence. It is uncertain how the situation will play out, but it is clear that Genesis is in a difficult position. The company is exploring all options, but it seems that bankruptcy is becoming increasingly likely.