After having warned earlier that it may be facing bankruptcy, Genesis Trading has refuted claims that it is planning an imminent bankruptcy filing if it fails to cover a $1 billion shortfall.
The firm has been facing difficulties raising money for its lending unit. According to a Bloomberg report on November 21, Genesis Trading told investors it would have to file for bankruptcy. However, a spokesperson for the firm says there are no such plans as Genesis continues to have constructive discussions with creditors.
It plans to resolve the current situation consensually without the need for any bankruptcy filing. The firm intends to have constructive conversations with creditors. Genesis announced on November 16 that it had temporarily suspended withdrawals due to the unprecedented market turmoil brought in by FTX’s collapse. It had around $175 million worth of funds stuck in an FTX trading account. Genesis is exploring all possible options amidst the liquidity crunch. The pause in withdrawals led to a 75% spike in the market lending rate for the Genesis Dollar (GUS). This was attributed to a selloff and possible moves to short the asset.