It is believed that Moelis & Company has been hired to assist the ailing lending company in evaluating all available alternatives.
According to reports, Genesis Global Capital has recruited a restructuring consultant to evaluate all viable possibilities, including but not limited to a potential bankruptcy.
According to a report from The New York Times on November 22, the company has hired investment bank Moelis & Company to explore its options. However, according to sources familiar with the situation, no financial decisions have been made, and it is still possible for the company to avoid filing for bankruptcy.
Moelis & Company was also among the companies retained by Voyager Digital after it halted withdrawals and deposits on July 1 to investigate “strategic alternatives.”
As part of a restructuring plan that would ultimately “return value to customers,” Voyager Digital filed for Chapter 11 bankruptcy in the Southern District Court of New York days later.
A Genesis spokeswoman informed Cointelegraph that the company has no “imminent” intentions to file for bankruptcy, contradicting a Bloomberg article dated November 21.
“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,” said the spokesperson.
Genesis reportedly seeks between $500 million and $1 billion from investors to fill a gap caused by “extraordinary market turbulence” and the demise of cryptocurrency exchange FTX.
According to a report published on November 22 by Bloomberg, the troubled lending company has $2.8 billion in outstanding loans on its balance sheet, with approximately 30% of its lending going to “related parties” such as its parent company Digital Currency Group and its affiliate and lending unit, Genesis Global Trading.
In a recently circulated letter, Digital Currency Group CEO Barry Silbert alleges that the company owes Genesis Global Capital $575 million, due in May 2023.
Since FTX’s collapse on November 11, all eyes have been on Genesis, Grayscale Investments, and its parent company, Digital Currency Group, out of worry that they may be the following enterprises to fall prey to the contagion.
In the last week, all three firms have attempted to ease investor concerns.
In a tweet dated November 17, Grayscale Investments informed investors that “the safety and security of the holdings underlying Grayscale digital asset products are unaffected” about Genesis Global Trading’s withdrawal suspension, stressing that its products continue to function normally.
In the wake of recent events, our investors should know that the safety and security of the holdings underlying Grayscale digital asset products are unaffected. ?
Genesis reaffirmed that its spot and derivatives trading and custody operations “remain fully operational,” notwithstanding the suspension of customer withdrawals from its loan company.
Genesis’s spot and derivatives trading and custody businesses remain fully operational. We continue to support our clients who rely on us during volatile market conditions to manage their risk and execute on their business strategies.
The recent investor letter from Digital Currency Group CEO Barry Silbert reassured investors that the company is on target to generate $800 million in sales in 2022.
“We have weathered previous crypto winters, and while this one may feel more severe, collectively, we will come out of it stronger,” he said.
