Per Reuters

After the FTX fiasco, another crypto brokerage is trying to avoid bankruptcy. Although having not yet announced bankruptcy like BlockFi, creditors of Genesis are scrambling to prevent insolvency by seeking advice from restructuring lawyers.

People knowledgeable about the situation said two groups of creditors are seeking the advice of Kirkland & Ellis and Proskauer Rose respectively, per Bloomberg. In light of what happened with FTX, the creditors are now scrambling to look for ways to avoid the same situation happening to Genesis.

Genesis' balance sheet still has $2.8 billion worth of outstanding loans, with 30% made to related parties, including Digital Currency Group, its parent company.

On Nov 16, DCG was at the center of an unwanted spotlight as Genesis suspended withdrawals. In 2015, DCG sold $700 million of stock to SoftBank Group Corp in a private sale boosting its valuation to $10 billion.

DGC had 66 employees in November, with over 200 companies in its portfolio, including Genesis, CoinDesk, and Grayscale. Derar Islim, Genesis' interim chief executive, sent a letter to clients saying they are looking for a solution to avoid the worst from happening by having discussions with potential investors and their largest creditors.

The solution Genesis is searching for would help them shore up their "lending business' overall liquidity and address client's needs."

In the letter, Genesis hired Moelis & Company, an investment bank, to evaluate the best possible strategy for asset preservation. The goal of the crypto brokerage working with the investment bank is to "effectuate a roadmap" for the said possible asset prevention strategy.

Genesis Trading suspended customer redemptions earlier in November, citing the sudden FTX failure. The company said it had approximately $175 million in locked funds with FTX.

DCG, a venture capital company and owner of Genesis Trading , owes Genesis' crypto lending arm a whopping $575 million, per Barry Silbert.

During FTX's demise, Genesis tweeted that they recognized how the FTX news impacted everyone. Gemini, the crypto exchange owned by the Winklevoss brothers, said it was pausing withdrawals for its interest-bearing Earn accounts due to the changes by Genesis, per CNBC.

Gemini said they are working with Genesis to help redeem customer funds for the Earn program as fast as possible. Gemini saw $485 million in net outflow over the last 24 hours, per Coin Desk.

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