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Bitcoin, the largest cryptocurrency, is trading in the read as the crypto sector is facing yet another high-profile bankruptcy.
Amid mounting pressure and against the backdrop of prolonged confidential negotiations with creditors, cryptocurrency lending giant Genesis Global Capital is reportedly prepping for a potential bankruptcy filing, according to a Bloomberg report.
According to sources familiar with the matter, the subsidiary of Barry Silbert’s Digital Currency Group (DCG) has informed creditor groups that it needs to raise cash urgently in order to avoid such a scenario. However, a bankruptcy filing appears to be imminent at this point, as per the report.
Talks between DCG and creditors have yielded no substantial progress yet. It is understood that leading Wall Street law firms such as Kirkland & Ellis and Proskauer Rose are currently consulting the creditors. Representatives at both DCG and Genesis Global Capital do not respond to comment requests.
Genesis came under scrutiny after abruptly suspending withdrawals on Nov. 16. This came nearly immediately after crypto exchange FTX filed for bankruptcy earlier that month.
The shockwaves quickly spread across the broader crypto industry, affecting the Gemini exchange, which is run by Cameron and Tyler Winklevoss. Gemini had to halt its Gemini Earn program, with creditors not being able to receive their money. The issue became the subject of a public spat between the Winklevoss twins and Silbert.