The FTX collapse could cause crypto brokerage Genesis to go bankrupt

The recent crisis surrounding FTX and Alameda has had a drastic effect on the entire market, resulting in all businesses and sectors connected to the crypto space being negatively affected.

Alameda and Genesis were the creditors of Genesis Global for a certain time period, and the current bankruptcy of FTX could potentially lead to Genesis and its subsidiary, Digital Currency Group (DCG), filing for bankruptcy as well.

According to Ryan Selkis, the founder of Messari, the close relationship between Genesis and Alameda as crypto borrower-lender is the main cause of Genesis’ potential bankruptcy.

A representative of Genesis declared in a statement that, despite the current situation, their intention is to overcome the crisis without filing for bankruptcy.

However, analysts anticipate that Genesis will eventually have to resort to bankruptcy due to the significant impact of FTX and Alameda networks on the crypto industry.

The two companies were linked as crypto borrower-lender counterparties and had various loans in place.

However, due to the large loan amounts and current economic downturn, Genesis is in a difficult spot.

To avoid bankruptcy, Ryan believes that the liquidation of Genesis and DCG will rely on Grayscale GBTC Risks, and that FTX and Alameda are not creditors of Genesis, as there is no bond between the two companies.