The global crypto market valuation which was once around $1 trillion a couple of weeks ago, has dropped to below $800 billion with many cryptocurrencies correcting drastically. Crypto exchanges are following a trend of bankruptcies, with illiquidity as one of the main problems.
There are speculations that crypto brokerage Genesis Trading, part of Barry Silbert’s Digital Currency Group (DCG), might be next in line to file for bankruptcy.
According to a Bloomberg report, Genesis has warned that if it doesn’t hit its target in a fresh funding round, it may go bankrupt. The firm initially sought a whopping $1 billion but has now slashed its goal in half. However, Genesis simultaneously said that it had no plans to file for bankruptcy imminently.
During this critical period in the crypto space post the FTX crash, Genesis has not been very consistent with its communication. Just a few weeks ago, it said it had everything under control, and now it’s desperate for cash.
On 11th November, they tweeted that they have ~175M in locked funds in our FTX trading account which doesn’t impact their market-making activities.
As part of our goal in providing transparency around this week’s market events, the Genesis derivatives business currently has ~$175M in locked funds in our FTX trading account. This does not impact our market-making activities.
— Genesis (@GenesisTrading) November 10, 2022
Now according to sources, they’re looking for $1B in fresh capital, which includes talks with potential investment from Binance.
In their latest tweets, they stated their #1 Priority is to serve clients and preserve their assets and that they’re doing everything they can to navigate the crypto crash.
We recognize how challenging this past week has been due to the impact of the FTX news. At Genesis we are entirely focused on doing everything we can to serve our clients and navigate this difficult market environment.
— Genesis (@GenesisTrading) November 16, 2022