Digital-asset brokerage Genesis Global Trading Inc is struggling to raise fresh cash for its lending unit, and it is warning potential investors that it might need to file for bankruptcy if its efforts fail, people with knowledge of the matter have said.
Genesis has spent the past several days seeking at least US$1 billion in fresh capital, said the people, who asked not to be identified because discussions are private.
That included talks over a potential investment from crypto exchange Binance Holdings Ltd (幣安), they said, but funding so far has failed to materialize.
Photo: Bloomberg
The rush for funding was precipitated by a liquidity crunch at the lender after the sudden collapse of FTX Group, one of the world’s largest crypto exchanges.
Genesis halted redemptions shortly after revealing on Nov. 10 that it had US$175 million locked in an FTX trading account.
“We have no plans to file bankruptcy imminently,” a representative for Genesis said in an e-mailed statement. “Our goal is to resolve the current situation consensually without the need for any bankruptcy filing. Genesis continues to have constructive conversations with creditors.”
Other platforms are facing their own struggles as redemption requests roll in after FTX’s bankruptcy filing roiled the crypto sector and left investors on edge about the risk of contagion.
Genesis is a counterparty to many in the digital asset space and is closely watched as a gauge of the industry’s strength. It is among the crypto lenders that are feeling acute strain after a prolonged rout in virtual coin prices amid multiple high-profile blowups.
The difficulties at Genesis have also buffeted the billionaire Winklevoss twins Tyler and Cameron, owners of the crypto exchange Gemini Trust Co.
In response to Genesis suspending withdrawals, Gemini halted redemptions from its Earn product. That left in limbo a program that, according to a person familiar with the matter, has US$700 million of customer money tied up in it.
An FTX Group bankruptcy filing showed that the fallen cryptocurrency exchange and a number of affiliates had a combined cash balance of US$1.24 billion.
The document from Alvarez & Marsal North America LLC, the proposed financial adviser to FTX, said trading house Alameda Research LLC and related firms had a cash balance of almost US$401 million.
Among FTX exchange platforms, FTX Japan had a cash balance of US$171.7 million, the breakdown showed.
The latest tally as of Sunday “identifies substantially higher cash balances than the debtors were in a position to substantiate as of Wednesday, Nov. 16,” according to the filing.
Sam Bankman-Fried’s FTX empire slid into a chaotic bankruptcy on Nov. 11, potentially leaving more than 1 million creditors and fomenting turmoil in the crypto sector.
Earlier court papers showed that FTX-linked entities owed their 50 biggest unsecured creditors a total of US$3.1 billion.
Preliminary filings have also indicated FTX assets and liabilities of at least US$10 billion each.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday obtained the government’s approval to inject an additional US$7.5 billion into its US subsidiary, the Department of Investment Review said in a statement. The department approved TSMC’s application of investing in TSMC Arizona Corp, which is engaged in the manufacturing, sales, testing and design of IC and other semiconductor devices, it said. The latest capital injection follows a US$5 billion investment for TSMC Arizona approved in June. The chipmaker has broken ground on two advanced fabs in Arizona with aggregated investments approved by the department totaling US$24 billion thus far. According to TSMC, the first Arizona
The lethal hack of Hezbollah’s Asian-branded pagers and walkie-talkies has sparked an intense search for the devices’ path, revealing a murky market for older technologies where buyers might have few assurances about what they are getting. While supply chains and distribution channels for higher-margin and newer products are tightly managed, that is not the case for older electronics from Asia where counterfeiting, surplus inventories and complex contract manufacturing deals can sometimes make it impossible to identify the source of a product, analysts and consultants say. The response from the companies at the center of the booby-trapped gadgets that killed 37
FRIENDLY TAKEOVER: While Qualcomm Inc’s proposal to buy some or all of Intel raises the prospect of other competitors, Broadcom Inc is staying on the sidelines Qualcomm Inc has approached Intel Corp to discuss a potential acquisition of the struggling chipmaker, people with knowledge of the matter said, raising the prospect of one of the biggest-ever merger and acquisition deals. California-based Qualcomm proposed a friendly takeover for Intel in recent days, said the sources, who asked not to be identified discussing confidential information. The proposal is for all of the chipmaker, although Qualcomm has not ruled out buying some parts of Intel and selling off others. It is uncertain whether the initial approach would lead to an agreement and any deal is likely to come under close antitrust scrutiny
SECURITY CONCERNS: The proposed ban on Chinese autonomous vehicle software and hardware would go into effect with the 2027 and 2030 model years respectively The US Department of Commerce today is expected to propose prohibiting Chinese software and hardware in connected and autonomous vehicles on US roads due to national security concerns, two sources said. US President Joe Biden’s administration has raised concerns about the collection of data by Chinese companies on US drivers and infrastructure as well as the potential foreign manipulation of vehicles connected to the Internet and navigation systems. The proposed regulation would ban the import and sale of vehicles from China with key communications or automated driving system software or hardware, said the two sources, who declined to be identified because the