Binance turns down request to invest in Genesis
Crypto broker Genesis Global has reportedly approached Binance for a fresh cash injection, but the crypto exchange decided to pass.
By Anna B Kiwanuka
Towards the end of last week, Genesis Global Capital, the lending business of Genesis Trading suspended redemptions. The move was made in response to the severe market disruption and loss of industry confidence brought on by the collapse of FTX, according to its parent firm, Digital Currency Group.
The business then applied for a $1 billion emergency loan. The cryptocurrency lender issued a warning yesterday, stating that the company would fail without funding backing.
According to a recent report from The Wall Street Journal, Genesis asked Binance for an investment. Per the media outlet’s unknown sources, Genesis also reached out to private equity giant Apollo Global Management for support.
The former, however, ended up turning down the request.
Elaborating on why, the report noted, “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.”
It’s important to remember that Changpeng Zhao, CEO of Binance, recently disclosed that the exchange was creating a recovery fund to assist projects amid a liquidity crisis. Genesis contacting Binance to save its sinking ship is therefore not entirely unexpected.
Genesis’ request was denied by the biggest cryptocurrency exchange, although the lender has no immediate plans to declare bankruptcy. In response to the current situation, the spokesperson commented,
“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.”
Nonetheless, it should also be noted that the lender lent $2.4 billion to Three Arrows Capital. Notably, Genesis’ parent company, Digital Currency Group has a $1.2 billion claim against the hedge fund.