Binance Exchange Declines Request to Fund Struggling Genesis

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  • The corporation promptly applied for a $1 billion emergency loan.
  • Apollo Global Management was reportedly also approached by the firm for funding.

Genesis Global Capital, a lending division of Genesis Trading, temporarily halted withdrawals at the end of last week. The parent business, Digital Currency Group, said that they made the call because of the “extreme market dislocation” and “loss of industry confidence” that FTX’s collapse created.

The corporation promptly applied for a $1 billion emergency loan. The cryptocurrency lending company said earlier today that it would be forced into bankruptcy if it did not get further money. WSJ recently reported that Genesis has approached Binance about making an investment. Private equity powerhouse Apollo Global Management was reportedly also approached by the firm for funding, according to unnamed sources cited by the media site. The former, however, declined the offer.

The report provided more explanation stating:

“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.” 

Striving to Resolve Situation

It is only recently that Binance’s CEO Changpeng Zhao said that the exchange was establishing a recovery fund to help projects amid a liquidity crisis.  Because of this, it shouldn’t be shocking that Genesis has resorted to Binance for help. Although the major cryptocurrency exchange denied Genesis’ request, the lender has no plans to go bankrupt.

A Spokesperson of Genesis stated:

“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.”

The lender also provided Three Arrows Capital with a $2.4 billion loan. Interestingly, Genesis’ parent firm, Digital Currency Group, has a $1.2 billion claim against the hedge fund.

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