Bankrupt crypto lender Genesis Global Capital LLC expects a deal with major creditors to come together within days to provide a framework for a possible sale of the lending business or a restart of operations, WSJ Pro Bankruptcy reported. Lawyers for the bankrupt crypto lender said in a court hearing that Genesis has been in round-the-clock negotiations with its parent company and largest borrower, Digital Currency Group Inc., as well as creditors and other stakeholders, but couldn’t seal a restructuring settlement before filing chapter 11 last week. “We are quite close,” said Sean O’Neal, a lawyer for Genesis, at Monday’s hearing in the U.S. Bankruptcy Court in New York. Absent a resolution “within the next few days,” Genesis will return to bankruptcy court to seek the appointment of a mediator, Mr. O’Neal said. A resolution with institutions that put their clients’ money with Genesis is important to jump-start other parts of its chapter 11 exit framework, including the marketing of its assets for sale and a possible capital raise, he said. Genesis Global Holdco and its subsidiaries Genesis Global Capital LLC and Genesis Asia Pacific Pte. Ltd. filed for chapter 11 largely because of their entanglements with failed crypto exchange FTX and hedge fund Three Arrows Capital. Genesis took deposits from institutional customers and lent those assets out, often to hedge funds for speculation on crypto markets. The company’s chapter 11 filing doesn’t cover its derivatives, spot trading, custody and brokerage arms, which continue business as usual.
