FTX Collapse May Lead Crypto Brokerage Genesis to Go Bankrupt
Crypto lending Genesis is expected to file for bankruptcy.
The collapse of FTX and Alameda had a great impact on Genesis.
Drawdowns of loans can prevent Genesis and DCG from bankruptcy.
Significantly, the entire market has been affected by the ongoing crisis of FTX and Alameda over recent months. All businesses and sectors linked with crypto space experienced a terrible face of its life. In that line, Alameda or Genesis were the creditors of Genesis global over a certain period. Thus, the existing bankruptcy of FTX can lead Genesis and its subsidiary company, Digital Currency Group (DCG) for bankruptcy filing.
In addition, the prominent reason for Genesis to go bankrupt is the strong bond of Genesis and Alameda as crypto borrower-lender states, Messari’s founder Ryan Selkis.
As the situations are unpredictable, by the end of November, a Genesis spokesperson revealed a statement. In which he says, the main intention of our business is to resolve this ongoing crisis without any bankruptcy filing. Unfortunately, the experts are highly expecting that Genesis will soon file a bankruptcy.
Genesis and DCG to file bankruptcy?
The FTX and Alameda networks caused a great collapse in the industry thereby affecting many crypto firms. One among them is, Genesis which was in connection with the Alameda as crypto borrower-lender counterparties. Working together, both the firms had many loans.
However, with huge loan amounts and the current crises of the collapse, Genesis is facing a bottleneck situation. But if the firm finds a way to reduce its loan amounts, then both Genesis and DCG can prevent bankruptcy.
Further, Ryan predicts that the liquidation of Genesis and DCG bankruptcy will solely depend on Grayscale GBTC Risks. In addition, currently, FTX and Alameda are not serving as creditors for Genesis. Even there is no bond between both the firms.
In this case, Ryan believes Genesis and Alameda will be involved in an extensive legal battle.
Filed under: Bitcoin - @ December 12, 2022 3:19 pm