Crypto lender Genesis Global halts withdrawals due to 'unprecedented market turmoil'
The institutional crypto lender said it would temporarily suspend redemptions and new loan originations in the lending business.
While explaining the decision, Genesis Global cited “unprecedented market turmoil” followed by the collapse of FTX exchange, resulting in “abnormal” levels of withdrawals that the firm claims to have exceeded its current liquidity.
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
Genesis also added that its current liquidity was negatively impacted by the collapse of 3AC in June. As part of bankruptcy proceedings, the brokerage has filed a $1.2B claim against Three Arrows Capital (3AC).
It is unclear what the firm’s liquidity levels are but previously it has been reported that Genesis Global had $175 million worth of funds stuck on FTX exchange. In response, the parent company of Genesis Global, Digital Currency Group has sent its subsidiary an emergency $140M equity infusion to cover the losses. The firm also claimed that its spot, derivatives trading and custody businesses remain fully operational.
In its latest quarterly report, Genesis Global stated that it has $2.8 billion worth of active loans. However, Genesis Global currently serves as the liquidity provider of the popular $6.7B Grayscale Bitcoin Investment Trust (GBTC).