Binance CEO Changpeng Zhao (CZ) is reportedly examining the prospects of buying Genesis’ loan book. Reports said CZ has contacted people to learn about the digital asset financial services firm ’s current issues which carry Q3 2022 balance sheet of $2.8 billion in active loans.
Genesis’ parent, Digital Currency Group (DCG), may resist Binance’s advances. The lending platform reportedly had direct exposure of $175 million to FTX in the week ending Nov 12 after suffering losses of hundreds of millions of dollars during the crypto meltdown since May. The vanishing liquidity has impacted brokers and the lending platform at Genesis Trading.
Barry Silbert-led DCG manages assets worth more than $50 billion and has multiple investments in blockchain-based start-ups and early-stage crypto enterprises.
Buying Genesis’ loan portfolio can boost Binance’s position at the top. A bigger gain will be wiping out a significant competitor and CZ earning the muscle to dictate terms to rivals such as stablecoin issuers Gemini and Circle that are competing with Binance network’s stablecoin BUSD, produced by Paxos.
Reports also said, B2C2, a leading crypto currency market maker is also looking to take over Genesis loan portfolio.
“B2C2Group wishes to extend an offer to purchase loans from Genesis Trading’s book to alleviate the current liquidity shortfall,” tweeted B2C2 founder Max Boonen.
Boonen, a former Goldman Sachs trader founded B2C2 in 2015 as regulated financial services firm in the United Kingdom. He observed that the 2008 financial crisis had highlighted that financial institutions need to “support its subsidiaries” to stay credible.
