Genesis Global is a known brokerage and lending company, and it is now buried in debt due to the many loans it applied for, with as much as $2.8 billion borrowed to fund its companies. Reports claim that the company shared some of its funds with its parent company, Barry Silbert's Digital Currency Group, and other subsidiaries known to the public.
DCG already claimed that its revenue would fall short of its initial expectations, especially as 2022 is drawing close to an end this year.
Genesis Global Takes Loans to Save its Companies
(Photo : Eugene Gologursky/Getty Images for Yahoo Finance/Oath)
According to Bloomberg's report, Genesis Global has an outstanding loan of a whopping $2.8 billion from different companies and banks, one of which it uses to fund its parent company and other sister companies. The company is not yet going under, but these loans are incurring debt and have the money passing to each subsidiary of the company.
Genesis Global Trading, the brokerage subsidiary, gets funds from the company's lending subsidiary, Genesis Global Capital.
There is as much as 30 percent of the company's lending was made to fund its entirety, extending up to the parent company from Barry Silbert, Digital Currency Group.
Digital Currency Group: Revenue Would Fall Short
The company, Digital Currency Group, also claimed that its revenue for this year will fall short of the initial expectations that it set out at the beginning. According to the Wall Street Journal, this is also part of the company's struggle in maintaining its business, and its intercompany lending to the different subsidiaries it maintains.
DCG expects $800 million in revenue this year, 20 percent lower than last year's results.
Cryptocurrency and Its Industry Now
The cryptocurrency industry now is centering on the many changes in the world, especially as it went back after the pandemic when the world faced massive inflation as industries started to return. Now, cryptocurrency is more speculated to fail because of the lowering prices in the market, and also the crashes in recent times.
There are many blockchains and digital assets that are struggling to maintain their prices or rally past their safety points which only indicates that the market may be facing a recession in this climate.
One cryptocurrency trading platform, the highly-renowned FTX, already filed for bankruptcy to protect its assets, continue operations, and aid the public with the many funds they transferred to the company. The company aims to help its investors and the people who were trading under the company's platform, especially during a crucial point in their operations.
Now, another digital assets company is looking at loans and incurring debt to add funds and capital integral to keeping their operations running and smooth. Genesis Global is experiencing this now, and Barry Silbert's company cannot ensure that it will meet the said revenue it promised investors in this current economic climate.
Related Article: FTX Begins Strategic Review of Assets, Files Court Relief to Pay Vendors
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Written by Isaiah Richard
