Crypto Contagion: Binance Refused To Rescue Troubled Crypto Lender Genesis!

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The troubled U.S. crypto lender Genesis said it has no immediate plans to file for bankruptcy after the FTX collapse forced it to suspend customer redemptions. A report from Bloomberg News said Genesis was struggling to raise fresh cash for its lending unit. The lender has approached crypto Binance for investment and to bid for its loan book, according to people familiar with the matter. However, Binance decided not to invest.

Genesis lent $2.4 billion to the now-bankrupt crypto hedge fund Three Arrows Capital (3AC). These funds are gone for now, which may be part of the liquidity issues.

Binance decided not to invest and rescue the crypto lender, 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.

According to a WSJ report, the company also approached private equity giant Apollo Global Management for capital assistance, according to people familiar with the matter.

We have no plans to file bankruptcy imminently. Our goal is to resolve the current situation consensually without the need for any bankruptcy filing.

a Genesis spokesperson said in an emailed statement to Reuters

Crypto exchange Gemini, which runs a crypto lending product in partnership with Genesis, said that it was continuing to work with the company to enable its users to redeem funds from its yield-generating “Earn” programme.

Genesis initially sought an emergency loan of $1 billion from investors before it suspended redemptions and loan origination. Genesis had $2.8 billion in active loans at the end of the third quarter, down from $11.1 billion in that quarter a year earlier when cryptocurrency values boomed, according to the company’s financial statements.

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