Digital Currency Group (DCG), the parent company of crypto trading firm Genesis, is stepping in to provide a $140 million equity infusion to Genesis after it said that its derivatives business had $175 million locked up on the FTX platform.
The capital infusion will be used to strengthen Genesis’s balance sheet and bolster its position in the crypto market, the firm said in a note sent to a counterparty, which was reviewed by The Block.
Genesis’s operating capital isn’t impacted and the net positions on FTX are not material, said Genesis on Thursday. It also has no ongoing lending relationships with FTX or sister firm Alameda Research, it said. This message was again reiterated in the note.
FTX filed for bankruptcy on Friday after facing a liquidity crunch as its FTT token cratered. A rescue deal with Binance fell through Wednesday after the rival exchange saw FTX’s finances.
Genesis recently reshuffled its leadership team and laid off staff. Those changes appeared to be in direct response to high-profile losses related to defunct crypto hedge fund, Three Arrows Capital (3AC). It lent $2.36 billion to the hedge fund, DCG stepped in to take on the firm’s liabilities and made a $1.2 billion claim against 3AC.
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Source: https://www.theblock.co/post/185834/trading-firm-genesis-to-get-140-million-equity-infusion-from-parent-company-dcg?utm_source=rss&utm_medium=rss