Bitcoin Price Drops to Two-Year Low After Major Crypto Lending Platform Genesis Shows Bad Signs And May Go Bankrupt According to Another Case, Mirroring the Domino Effect in the FTX Crisis.
Bloomberg News and the Wall Street Journal The report cited relevant news sources as follows: Major cryptocurrency lending platforms such as Genesis struggling to get funding from multiple sources by negotiating with both Binance which is the world’s number 1 largest crypto trading platform, to a huge investment management company like Apollo Global Management Find capital of at least US $ 1,000 million (about 3.6 billion baht) to support liquidity.
However, Binance, led by CEO Changpeng Zhao (CZ), has refused to invest. by justifying the risk that could cause a conflict of interest
Genesis is one of the companies affected by the company’s bankruptcy filing. FTX The former No. 2 crypto trading platform in the world, due to the impact of crypto market sentiment, has led to an unusually high flow of withdrawals from Genesis. Until the company had to announce a suspended withdrawal last week.
The situation led to a swirl of rumors that Genesis could be the next Domino to go bankrupt following FTX. Bitcoin Fell heavily in the early morning today Until it hit a 2-year low at $15,480/BTC before gradually recovering a bit later It rose to around $15,819/BTC around 11:30 am
A Genesis representative confirmed that to Bloomberg The company has no plans to file for bankruptcy anytime soon, and aims to resolve the issue now by negotiating with its creditors and investors. without entering the bankruptcy process
Genesis is one of FTX’s creditors, having made a number of loans to Alameda Research which is a subsidiary of FTX, while before The company has already suffered another round of lending $ 2.4 billion (about 87 billion baht) to hedge funds. Capital of Three Speeches During the Terra LUNA Crisis
The impact and stagnation of the crypto market this year has made it worse. Causing the company to announce 20% redundancies in August.
In the third quarter of this year, Genesis borrowed a total of $ 2.8 billion, a decrease of almost four times compared to the same quarter last year. This was during a boom market and resulted in high borrowing of $11.1 billion.
BlockFi may be the first domino to fall.
Previously, decentralized crypto lending platforms BlockFi is another company that has reported Also at risk of filing bankruptcy. As he was facing heavy losses from FTX, he had to previously announce a suspension of withdrawals. Also at risk of filing bankruptcy. Because it was facing heavy losses from FTX, it had to announce a withdrawal stop earlier.
The Wall Street Journal has reported, citing relevant sources, that BlockFi, a decentralized digital currency lending platform, or DeFi, could be the first domino to fall on the crypto table. because it is preparing to enter the process It has already “filed for bankruptcy” under Chapter 11 (reorganization request), and will soon announce mass “layoffs” of employees.
BlockFi is also reported to have negotiated assistance from CZ of Binance. But no details were revealed. and until now There is still no progress on the BlockFi solution.
Source: https://www.bloomberg.com/news/articles/2022-11-22/bitcoin-s-slide-pauses-in-wait-for-next-domino-to-fall-after-ftx
https://www.coindesk.com/business/2022/11/21/genesis-bankruptcy-jitters-send-bitcoin-to-fresh-low/
