Crypto Lender Genesis Asks Binance and Apollo for Cash
Cryptocurrency firm Genesis Global Capital is still trying to raise cash.
The lender has approached crypto exchange Binance for an investment and to bid for its loan book, according to people familiar with the matter.
Binance decided not to invest, fearful that some of Genesis’s business could create a conflict of interest down the line, according to one of the people familiar with the matter. The company also approached private equity giant Apollo Global Management APO 1.13%increase; green up pointing triangle for capital assistance, according to people familiar with the matter.
“We have no plans to file bankruptcy imminently. Our goal is to resolve the current situation consensually without the need for any bankruptcy filing. Genesis continues to have constructive conversations with creditors,” a Genesis spokesman said.
Genesis has faced a rush of withdrawals from its lending arm following the collapse of crypto exchange FTX. The company initially sought an emergency loan of $1 billion from investors before it told clients it was suspending redemptions and loan originations in a brief call Nov. 16, Genesis said. At that meeting, Interim Chief Executive Derar Islim said Genesis would deliver a plan for its lending business this week.
Genesis’s outreach to Binance was first reported by Bloomberg.
Genesis became the latest crypto lender to pause withdrawals last week after the swift and sudden collapse of FTX founder Sam Bankman-Fried’s crypto empire. The Wall Street Journal has previously reported that Genesis had loans outstanding to Alameda Research, an affiliated trading firm of FTX that Mr. Bankman-Fried founded, with FTX’s own cryptocurrency used as collateral.
Earlier this year, Genesis lent $2.4 billion to Three Arrows, according to court documents. Genesis’s parent company, Digital Currency Group, has a $1.2 billion claim against the hedge fund.
In August, Genesis laid off 20% of its 260-person workforce amid a restructuring that saw the departure of then-Chief Executive Michael Moro.
Genesis had $2.8 billion in active loans at the end of the third quarter, down from $11.1 billion in that quarter a year earlier when cryptocurrency values boomed, according to the company’s financial statements.
Binance’s chief executive Changpeng Zhao said earlier this month that Binance is forming a recovery fund to help strong cryptocurrency projects that are facing temporary cash shortages. Mr. Zhao said details on the fund would come in the future.