Creditors of the crypto lending platform, Genesis, are out to prevent the bankruptcy of the platform by hiring restructuring lawyers and exploring other options to shield DCG.
Economic factors such as interest rate hikes and crypto market events continue to impact BTC’s price positively or negatively.
As Bitcoin investors await the release of the scheduled speech of Jerome Powell, the Federal Reserve chair, market experts will be keenly assessing his speech to find hints at the Fed’s next move regarding monetary policies, especially inflation rates.
Will this impact BTC’s price?
Following the third aggressive interest rate hike of 2022, an increase to 75 basis points, the entire market is waiting in anticipation of the central bank’s next course of action. There are speculations that Powell is likely to suspend further hikes temporarily.
Over the past few days, several Fed officials have been quoted saying that the regulator might adopt a 50 basis point rate hike as its benchmark.
Interestingly, the wide expectations seemingly influenced Bitcoin’s price movement. The asset has witnessed a 2.5 percent price uptrend in the past 24 hours, with the price at some point reaching a two-week high of $17,072.
Currently, the general belief among Bitcoin enthusiasts and market experts is that BTC is likely to reverse its downtrend as a possible bullish trend appears on the horizon. However, the entire Bitcoin ecosystem is currently concerned with the survival battle of the Genesis Trading platform.
As reported by Bloomberg, creditors of the distressed crypto lender are working on a restructuring plan alongside other options to prevent the firm from going bankrupt.
Genesis creditors engage lawyers on bankruptcy threat
According to sources familiar with the incident, creditors of Genesis Global Trading are in talks with restructuring lawyers to find a way to address the looming bankruptcy issue facing the troubled crypto brokerage firm.
The sources added that some of the creditors had hired the law firm. Proskauer Rose, while others are still using the services of Kirkland & Ellis, another famous law firm. Furthermore, the move is also part of a plan to prevent further damage to Genesis’ parent company, Digital Currency Group (DCG), after its exposure to the now-collapsed FTX exchange.
Last week, Genesis hinted at an impending bankruptcy filing after it halted customer withdrawals due to the spread of the FTX contagion. In response, the CEO of DCG, Barry Silbert, released a memo addressing the speculations. He explained that the firm’s units are all operating as usual.
With the creditors taking it upon themselves to help prevent bankruptcy for Genesis, the DCG is also exploring other alternatives to stabilize the group and its subsidiary. However, there are divided sentiments among the industry players about how Genesis and DCG are handling the possible bankruptcy issue.
According to Ryan Selkis, Messari’s co-founder, the recapitalization of DCG, with a value of $3.2 billion, will likely lead to the revival of Genesis, and the current FTX contagion fears will vanish from the crypto market. In contrast, the co-founder of ArchPublic, Andrew Parish, was critical of Genesis’s activities, stating that no venture capitalist is ready to inject funds into Genesis Trading due to its desperate move.
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