Genesis Bankruptcy Rumor Drives BTC To New Lower Dip

Genesis - a crypto investment bank is in talks with investors to seek a tentative of $1 billion in fresh capital,  according to a report by Bloomberg. The lending firm disclosed that it has lost $175 million within FTX. Genesis revealed that they have an outstanding amount of $2.8 billion in loan debt.  The price of Bitcoin dropped to $15,480 after the news spread like wildfire. However, the price of BTC has recovered back to $15,913.

According to Wall Street, the bank may file for bankruptcy if they do not receive monetary relief. The investment bank had seeked Binance for fresh capital, but was refused as they had a conflict of interest..

​​Crypto lenders who enter a new and unregulated market have often emphasized the safety of their funds by requiring high levels of collateral. For instance, if a lender gave an investor 100 bitcoins, worth around $1.6 million today, it would require the investor to post more than 100 bitcoin in collateral as protection.  “Overcollateralized” aids in taking risk out of the system and allows crypto lenders to operate without any underwriting or KYC. Loans offered by Genesis sometimes required less collateral than the value of the loan or zero collateral.