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U.S. crypto broker Genesis says it is working to avoid bankruptcy filing

U.S. cryptocurrency brokerage Genesis said it was seeking to avoid bankruptcy after Bloomberg news reported on Tuesday that creditors to the firm are organizing with restructuring lawyers to prevent insolvency.

"Our goal is to resolve the current situation in the lending business without the need for any bankruptcy filing," a Genesis spokesperson said.

Representatives for Proskauer and K&E did not immediately respond to requests for comment.

"We've begun discussions with potential investors and our largest creditors and borrowers, including Gemini and DCG, to agree on a solution that shores up our lending business' overall liquidity and addresses clients' needs," Genesis' interim chief executive Derar Islim told clients in a letter seen by Reuters.

Genesis has hired investment bank Moelis & Company "to evaluate the best possible asset preservation strategy and effectuate a roadmap," the firm said in the letter.

The crypto lending arm of U.S. digital asset broker Genesis Trading suspended customer redemptions earlier this month, citing the sudden failure of FTX, where its derivatives business has approximately $175 million in locked funds, the company had said.

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