December 5, 2022

WSJ: Conflict of interest will prevent Binance from saving Genesis Trading

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WSJ: Conflict of interest will prevent Binance from saving Genesis Trading

The Binance exchange refused to provide financial assistance to Genesis Global Capital, which is struggling with a liquidity crisis and is trying to raise money to continue operations.

According to The Wall Street Journal(WSJ) crypto lender Genesis continues to seek funds to maintain operations. The company turned to the world's largest crypto exchange for financial support. However, Binance has decided not to invest in the project, as the WSJ learned from one of the people familiar with the matter, fearing that part of the Genesis business could create a conflict of interest in the future.

Late last week, crypto lending platform Genesis announced that it was temporarily suspending the processing of client withdrawal requests and is starting to look for new sources of liquidity.

Genesis is facing massive withdrawals following the collapse of the FTX cryptocurrency exchange. The company initially requested
emergency loan of $1 billion, and onlythen she informed clients that she was suspending repayment and issuance of loans. In addition to Binance, Genesis has also applied for a credit line from private equity giant Global Management, but it is not yet known if the parties have reached an agreement.

Now the crypto lender is rejecting any filings for possible bankruptcy%

“We have no plans to apply forbankruptcy in the near future. Our goal is to resolve the current situation by consensus without filing for bankruptcy. Genesis continues to engage in constructive negotiations with creditors.”

Acting CEO Derar Islim promised that this week Genesis will present a plan for the company's recovery from the crisis.

In November, Binance CEO Changpeng Zhao announced
on Twitter that his exchange is forming a recovery fund to help strong crypto projects that are facing a lack of liquidity.