The contagion effect of the FTX liquidity crunch seems not to be letting up. Another exposed firm, Genesis, the crypto lending unit of Genesis Global Trading, has halted withdrawals and the issuance of new loan permits. The announcement was made via the platform’s Twitter account.
We recognize how challenging this past week has been due to the impact of the FTX news. At Genesis we are entirely focused on doing everything we can to serve our clients and navigate this difficult market environment.
— Genesis (@GenesisTrading) November 16, 2022
This happened after several withdrawal requests flooded in, and Genesis could not grant them due to a lack of liquidity. The company claimed it has been struggling since Three Arrow Capital‘s default in June. It has since supplemented liquidity with other investments.
The FTX crisis wreaked even more havoc, causing withdrawals to be temporarily halted. The lending unit previously stated that their trading relationship with FTX has no bearing on their services. That information, however, has proven to be false.
Quarterly reports from Genesis show that it had more than $2.7 billion in active loans. Genesis says it is working with advisors to provide better solutions to avoid bankruptcy.
According to Amanda Cowie, vice president of communications at Genesis, “there was also no impact on the business operations of DCG and any of its subsidiaries.”
The events unfolding in the crypto markets point to the demise of the world’s third-largest exchange, FTX. The shocking crash has impacted many exchanges and companies around the world, including BlockFi and Voyager.
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