US crypto broker Genesis says it is working to avoid a bankruptcy filing

US cryptocurrency broker Genesis said it is trying to avoid bankruptcy after Bloomberg News reported on Tuesday that the firm’s creditors are organizing with restructuring lawyers to avoid bankruptcy.

Citing people familiar with the situation, the report said law firms Proskauer Rose and Kirkland & Ellis are being consulted by groups of creditors trying to resolve a situation similar to crypto exchange FTX’s rapid descent into bankruptcy to avoid.

“Our goal is to resolve the current lending situation without filing for bankruptcy,” said a Genesis spokesman.

Proskauer and K&E representatives did not immediately respond to requests for comment.

“We have entered into discussions with potential investors and our largest creditors and borrowers, including Gemini and DCG, to agree on a solution that will strengthen the overall liquidity of our lending business and address the needs of customers,” said Derar Islam, interim manager CEO of Genesis customers in letter seen by Reuters.

The report comes as U.S. securities regulators are investigating Genesis Global Capital as part of a wide-ranging investigation into the interdependence of crypto firms, Barron’s reported last week, citing comment from the director of the Alabama Securities Commission.

Genesis has hired investment bank Moelis & Company “to evaluate the best possible wealth preservation strategy and implement a roadmap,” the letter reads.

The crypto lending arm of US digital asset broker Genesis Trading suspended customer redemptions earlier this month, citing the sudden collapse of FTX, where its derivatives business has about $175 million in locked funds, the company had said .

Venture capital firm Digital Currency Group, which owns Genesis Trading and cryptocurrency wealth manager Grayscale, owes Genesis’ crypto lending arm $575 million, Digital Currency chief executive Barry Silbert told shareholders this month.