Another Fake Buying Proposal By Binance? Crypto

“It all started with CZ. It might end with CZ.”

The FTX-Alameda crisis has expanded to other projects such as Genesis Trading, Gemini, and BlockFi. As a result, Genesis has suspended withdrawals, while Gemini has gone offline, and BlockFi is preparing to file for bankruptcy.

Meanwhile, there are rumors that Binance CEO Changpeng Zhao is interested in acquiring Genesis' loan book. As per reports, CZ is reviewing Genesis' balance sheet and looking for more information. The Q3 2022 report shows Genesis Trading had $2.8 billion in active loans.

A source familiar with the matter claims that Genesis' parent firm, Digital Currency Group (DCG), will most likely reject Binance's offer, and approximately $2 billion will be required to be floated.

Last week, Binance disclosed its intention to buy FTX Exchange, but the exchange later backed off from the deal citing a false balance sheet as a reason. And FTX went bankrupt just a few days after the announcement. As CZ announces plans to acquire Genesis' loan book, speculation about Genesis' collapse grows stronger.

Binance's announcement is far more comparable to the previous FTX acquisition deal, which was later proven to be a fake proposal. What if this deal has the same outcome?

What’s next for Genesis?

Binance's position at the top of the crypto pyramid could be bolstered if CZ acquires Genesis' portfolio. A significant competitor will have vanished from the face of the earth, and CZ may even find himself in a position to choose whether to continue powering the lending program of other rivals, such as two stablecoin issuers, Gemini and Circle, which compete directly with Paxos' BUSD Binance stablecoin.

However, if the deal ends up being a carbon copy of the FTX acquisition, the platform may be forced to declare bankruptcy. Experts believe that Binance's CEO triggered this crisis and only CZ has the potential to help the market recover once again.

Conclusion

Genesis isn't the only company that is anticipated to feel the heat as a result of the ongoing turbulence in the cryptocurrency industry. However, it's just the beginning of a storm that will soon affect the broader crypto sector even further.

Although, not just CZ, but also B2C2, the industry's leading market maker, has offered to purchase debts from the crypto financial firm Genesis. So, if Binance withdraws from the acquisition deal, Genesis has an alternate option to support it.

What do you think about Binance's proposal to acquire Genesis' loan book? Will it end up like the FTX deal? Share your views in the comment section below.

Read also: FTX CEO: SBF Has Really no Function at FTX, FTX US, or Alameda