Cryptocurrency brokerage Genesis will reportedly get an equity infusion of $140 million from its parent company to strengthen its balance sheet after saying its derivatives business has $175 million locked in a trading account of FTX, which has filed for bankruptcy protection.
The infusion is coming from the crypto investment firm Digital Currency Group, Bloomberg reported Friday (Nov. 11).
CoinDesk, which is an independent subsidiary of Digital Currency Group, also reported on the $140 million equity infusion to Genesis and cited an email that it reported Genesis sent to clients.
“While the operation of our lending and trading businesses has not been impacted by recent market events, Genesis has taken steps to strengthen its balance sheet with an additional equity infusion of $140M from our parent company, Digital Currency Group,” the email said, per the report.
“The additional capital will bolster our position as a global leader in crypto capital markets and allow us to support our clients and the growing demand for our services,” the email said, according to the report.
Genesis did not immediately reply to PYMNTS’ request for comment.
When announcing on Twitter on Wednesday (Nov. 10) that it had $175 million in locked funds in its FTX trading account, Genesis tweeted: “This does not impact our market-making activities.”
On the same day, in another tweet, Genesis said: “Furthermore, our operating capital and net positions in FTX are not material to our business. Circumstances surrounding FTX have not impeded the full functioning of our trading franchise.”
More than 130 FTX Group companies filed for bankruptcy protection Friday, including FTX.com, FTX US and Alameda research.
Alameda Research and FTX US reportedly each have liabilities of between $10 billion and $50 billion, as well as assets within that same range.
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