Binance turns away Genesis

Binance has turned down an offer to invest in Genesis, the crypto lender and trading firm, as the latter company faces potential bankruptcy without a cash infusion, the Wall Street Journal reports.

Why it matters: After FTX's wipeout this month, many are looking to Binance, the biggest exchange on the market, to take its place as the acquirer of distressed crypto assets. But Binance has its limits.

Details: According to the Journal, Binance decided not to invest over concerns that some of Genesis' business could create a conflict of interest later down the line.

• Genesis also slashed its raise target from $1 billion to $500 million, per the Block's Frank Chaparro.
• Apollo Management was also approached, per Bloomberg, though the fund appears unlikely to get involved.

Of note: Genesis is a major player in the crypto world, meaning a bankruptcy would deepen the FTX contagion. But Genesis still says it hopes to resolve the issue without having to head into bankruptcy.

Context: This comes as Binance is seeking capital for a crypto recovery fund aimed at projects with strong fundamentals but lacking in liquidity.

• Binance CEO Changpeng Zhao last week said in a Twitter Spaces event that four or five investors were interested in chipping into the fund.

Thought bubble: Binance is a far bigger beast than FTX and facing greater regulatory scrutiny — limiting what it will and won't buy.

What they're saying: "I want to protect users, we want the industry to grow. But I don't want to categorically commit Binance to solve every problem," CZ said last week in the Spaces event. "If we do that, Binance will probably become bankrupt pretty soon. That's unfair to our users."

• Binance has not yet responded to an Axios request for comment on reports of the Genesis talks.