Genesis Global Capital Halts Bitcoin, Crypto Withdrawals
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Following the implosion of FTX and the locking up of over $175 million, Genesis’s lending arm faces a liquidity crisis and is actively seeking new capital.
Cryptocurrency lender Genesis Global Capital has paused withdrawals and loan applications following the collapse of FTX Exchange, per a tweet from Genesis Trading.
Genesis Global Capital boasts an institutional clientele with over $2.8 billion in active loans.
Genesis Trading operates as the broker arm of Genesis Capital and is independently operated and capitalized from the broader lending institution, interim CEO Derar Islim said. However, Islim did state that trading operations and custody services currently remain operational.
“Today Genesis Global Capital, Genesis’s lending business, made the difficult decision to temporarily suspend redemptions and new loan originations,” said Amanda Cowie, vice president of communications and marketing at Digital Currency Group (DCG), parent company of Genesis.
Islim also explained that Genesis was actively seeking solutions for its liquidity crises and would be looking for sources of “fresh liquidity”, per the report.
“This decision was made in response to the extreme market dislocation and loss of industry confidence caused by the FTX implosion,” Cowie said.
Following the collapse of FTX, Genesis made it known that over $175 million in locked funds were held by FTX, which prompted DCG to provide a $140 million equity infusion.
Genesis serves as the lending partner of Gemini Earn, and since Genesis can no longer honor withdrawals, neither can Gemini.
“We are disappointed that the Earn program [service agreement] will not be met, but we are encouraged by Genesis’ and its parent company Digital Currency Group’s commitment to doing everything in their power to fulfill their obligations to customers under the Earn program,” Gemini said.