Speculation over the contagion effects of the FTX bankruptcy has been brewing for days. Negative reports around the crypto broker Genesis are intensifying.
Digital asset specialist broker Genesis is apparently in trouble. As reported by «Bloomberg» (behind paywall), the company is struggling to find new money for its lending business Genesis Global Capital, with management looking for funding sources over the weekend.
Genesis is said to have approached US private markets firm Apollo Global Management, which recently agreed to take over parts of Credit Suisse's securitized loan business. The subsidiary of Digital Currency Group (DCG), one of the biggest players in the space, is said to have warned customers of possible bankruptcy.
Credit Business Suspended
Genesis told «Reuters» on Monday there were no immediate plans to file for bankruptcy. Instead, they are trying to resolve the situation through mutual agreement with stakeholders. Genesis Global Capital had already announced last week that it would suspend lending.
Genesis also reported derivatives losses of around $175 million in connection with last week's FTX bankruptcy, with DCG agreeing to cover $140 million at the time. One worrying aspect of the development is that Genesis mainly serves large professional customers.
