Binance has made another U-turn after refusing the FTX takeover. In the latest, it said it doesn’t intend to take over the loan book of crypto lender Genesis and provide a $1-billion emergency loan, according to reports.
Binance refused any deal, citing a potential conflict of interest with the business model of Genesis, which had suspended client withdrawals and announced seeking a $1-billion emergency cash loan.
It appears that the internal due diligence has made Binance backtrack on the opportunity to invest in Genesis, which is owned by the Digital Currency Group. Genesis had also tried to secure investments from Apollo Global Management.
Genesis began struggling after a run on withdrawals at the affiliated exchange, Gemini, in the wake of the FTX collapse. It is looking for other options and is in no haste to file for bankruptcy despite Binance declining to invest.
Meanwhile, Genesis has said constructive conversations with creditors are on.
On November 16, Genesis temporarily halted withdrawals citing “unprecedented market turmoil” after FTX’s collapse. On November 10, it revealed $175 million worth of its funds is stuck in an FTX trading account.
There had been reports that Binance also has a strategic interest in funding Genesis, apart from the crisis support as noted in the statements, made by Binance’s CEO Changpeng Zhao who said his exchange would be setting up a recovery fund to aid projects in a liquidity crisis. So, the market has some surprise factors in Binance’s refusal to shore up Genesis.
