Genesis says it’s trying to avoid bankruptcy

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Genesis says it’s trying to avoid bankruptcy

After Bloomberg News reported on Tuesday that creditors to the firm are organizing with restructuring lawyers to prevent insolvency, Genesis said it was trying to avoid bankruptcy.

According to the report, law firms Proskauer Rose and Kirkland Ellis are being consulted by creditor groups who are trying to avoid a situation similar to FTX's rapid descent into bankruptcy, because of people with knowledge of the situation.

A Genesis spokesman said that the goal is to solve the current situation in the lending business without the need for a bankruptcy filing.

Representatives for Proskauer and K&E did not respond immediately to requests for comment.

In a letter seen by Reuters, Genesis interim chief executive Derar Islim told clients that they had begun discussions with potential investors and our largest creditors and borrowers, including Gemini and DCG.

The report comes as the U.S. state securities regulators are looking at Genesis Global Capital as part of a wide-ranging inquiry into the interconnectedness of the firms, Barron reported last week, citing a comment from the Alabama Securities Commission director.

The firm said in the letter that Genesis has hired Moelis Company to evaluate the best possible asset preservation strategy and create a roadmap.

The company said that the company's subsidiary, Genesis Trading, suspended customer redemptions earlier this month, because of the sudden failure of FTX, where its derivatives business has approximately $175 million in locked funds.

Digital Currency Group, which owns Genesis Trading and cryptocurrencies asset manager Grayscale, owes $575 million to Genesis's lending arm, according to Digital Currency Chief Executive Barry Silbert, told shareholders this month.