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Genesis Global Capital Appoints Services Of An Investment Bank

According to a report in The New York Times, which cited three people with knowledge of the situation, Genesis Global Capital has recruited the investment firm Moelis & Company to investigate several possibilities, including the possibility of declaring bankruptcy. Report also states, there are no final decisions have been made, and the company may still be able to avoid having to file for bankruptcy.

Due to the company’s exposure to the defunct cryptocurrency exchange FTX, Genesis had spent most of November frantically trying to obtain new money or come to an agreement with its creditors. The corporation’s institutional lending division was forced to halt redemptions and new originations the previous week. Additionally, Genesis has revealed in the past that its derivatives section had around 175 million dollars tied up in its FTX trading account. As a direct consequence of this, Genesis’ parent company, Digital Currency Group (DCG), made the decision to bolster the business’s balance sheet by injecting an additional $140 million in stock.

According to reports, Genesis experienced losses of up to hundreds of millions of dollars a few months ago as a result of loans it made to a failing cryptocurrency hedge fund called Three Arrows Capital. Separately on Tuesday, DCG founder and CEO Barry Silbert stated in a message to shareholders that the company owed Genesis Global Capital around $575 million, which is due in May 2023. Silbert made this revelation in response to a question about the liabilities.

Silbert also reminded investors of a promissory note for $1.1 billion that is due in June 2032. He said that this note was related to Genesis’s debts because Three Arrows Capital had not paid its bills.

DCG’s sole debt is a $350 million credit facility from a small group of lenders headed by Eldridge, according to what Silbert said. “Aside from the Genesis Global Capital intercompany loans due in May 2023 and the long-term promissory note, DCG’s only debt is a $350 million credit facility.” He went on to say that DCG has only been successful in raising $25 million in equity financing, but that the company is on track to make $800 million in sales this year.

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Reporter
Jeewan Singh is CryptoShrypto’s content writer and a seasoned writer with over two years of experience in writing about Indian Securities Market. Jeewan's participation in Blockchain and Cryptocurrency started in late 2020, and he hasn't looked back since. The technical and economic outcomes of cryptocurrency are what spark his curiosity, and he keeps one eye on the market.
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