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Genesis said it needs more time to seek a solution, while Messari suggested that the best solution might be a restructuring of the group's capital.

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Genesis said it needs more time to seek a solution, while Messari suggested that the best solution might be a restructuring of the group

Genesis interim CEO Derar Islim stated in a letter to clients on Wednesday that resolving the withdrawal freeze in its company's lending division may take several weeks. Meanwhile, Ryan Selkis, founder of crypto research firm Messari, suggested that the situation appears less optimistic than anticipated, with the best solution possibly involving corporate restructuring and refinancing.

Islim States Other Businesses Operating Normally

Following the bankruptcy declaration by the cryptocurrency exchange FTX, Genesis' lending arm has also announced a halt on customer redemptions. Subsequently, Genesis has been attempting to raise funds and negotiate with creditors, even hiring investment bank Moelis & Company to explore other options including bankruptcy, but it seems a consensus has not yet been reached.

According to a report by CoinDesk, Islim explained in a letter that Genesis will strive to be as "transparent" as possible with customers, currently consulting with experienced advisors and closely collaborating with its parent company DCG. Genesis' other businesses, trading and custody services, continue to operate as usual.

Previously, CoinDesk cited sources reporting that in addition to the $9 billion debt owed to Gemini, there is another group of creditors represented by law firm Proskauer Rose with a debt total of $9 billion, bringing the disclosed debt total to $18 billion.

Is Group Capital Restructuring the Best Solution?

Crypto research firm Messari founder Ryan Selkis also shared his views on the matter on Twitter, stating that if the GBTC held by the group is actually held by Genesis, the overall situation would be even less optimistic.

According to Messari's report, the best scenario may involve a capital restructuring by the group and negotiating with creditors for refinancing by replacing existing debts with new debts with different terms and rates, then allowing time and the expected recovery of the crypto ecosystem to enable both creditors and shareholders to recover their original funds.