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, Reuters reported. Citing people with knowledge of the situation, the report said law firms Proskauer Rose and Kirkland & Ellis are being consulted by creditor groups, who are seeking to avoid a situation similar to crypto exchange FTX's rapid descent into bankruptcy. "Our goal is to resolve the current situation in the lending business without the need for any bankruptcy filing," a Genesis spokesperson said. The report comes as U.S. state securities regulators are investigating Genesis Global Capital as part of a wide-ranging inquiry into the interconnectedness of crypto firms, Barron's reported last week, citing a comment from the Alabama Securities Commission director. 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.
