Is Genesis The Next FTX?
Crypto lender Genesis is having financial difficulty and trying to raise $1 Billion in capital from potential investors. They approached different investors for that, but unfortunately, they could not raise the capital that they need.
Genesis grew quickly and becomes popular in crypto. Now the situation is changing. After the collapse of FTX, Genesis is going through a hard time. It is revealed that it lost $175 million in FTX. They will not get much from the FTX and Alameda Research any time soon.
What we know about Genesis so far, maybe this is nothing compared to what we are going to know in the future. Is Genesis the next FTX? It is clear that they are facing big problems and trying to resolve that. The way FTX used to say that everything is fine, no worries, is Genesis going in the same direction?
As per Genesis, they don't have any plans for filing bankruptcy. They are working to resolve the current situation without going through any bankruptcy filing. If they get $1 billion in capital from investors, there is a chance they can deal with the ongoing situation.
Shocking information was revealed about FTX and how they mismanaged everything in FTX. People think big institutions protect customers crypto in a better way and they are more efficient about this. FTX stored private keys for customers' crypto assets in a shared email account. It is hard to believe. Is that their safe way to store private keys?
It was reported that there was a talk with the largest crypto exchange Binance to step in and help Genesis, but later Binance turned down the offer to make the investment in Crypto lender Genesis. When Binance steps back from getting involved in any crypto platform, that can spread more negative vibes in crypto.
FTX asked for help from Binance as a last resort, Binance wanted to look into it first. After looking into FTX's terrible financial situation, Binance denied getting involved in FTX. Now, what is going to happen with Genesis?
Looks like FTX would not go down alone, it will take other crypto platforms down with it. Again, that is the CEX to blame. The crypto market might crash further and we have already seen its effect. Crypto will move forward at its own speed. Centralized platforms might offer different things, but they will find a hard time surviving in the crypto space over time. People will focus more on decentralization.
So what do you think? Please feel free to leave your comments. Thank you for reading this post. That's it for now. I'll be back with another post.
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After watching Coffezilla, I think Genesis was already having trouble due to 3AC and UST. Their parent company also seems to have doubled down on GBTC and I think a lot of their funds are there. It's unlikely that Genesis even wants to sell it due to it being a sister company.
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Let's see what happens. It does not look good what happened so far.