December 1, 2022

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Genesis' lending unit halts withdrawals in wake of FTX's collapse

Genesis’ lending unit halts withdrawals in wake of FTX’s collapse

The FTX logo with cryptocurrencies is shown along with a $100 bill for clarity. FTX has filed for bankruptcy in the US, seeking court protection as it searches for a way to return funds to users.

Jonathan Ra | Norphoto | Getty Images

In the latest fallout from The rapid collapse of FTX Last week, the company announced that the lending arm of crypto-investment bank Genesis Global Trading had paused creation and redemption of new loans. Tweet thread Wednesday.

The lending arm of the bank serves an institutional client base and is known as Genesis Global Capital. At the end of the third quarter, it had more than $2.8 billion in total active loans, According to the company’s website.

“We know how difficult the past week has been due to the impact of the FTX news. At Genesis, we are fully focused on doing everything we can to serve our customers and navigate this challenging market environment,” Genesis he wrote in a tweet.

“Our number one priority is to serve our customers and preserve their assets.”

Genesis Trading, which acts as a broker/dealer for Genesis Global Capital, is independently funded and operated separately from its lending unit, interim CEO Derar Islim told clients on a call Wednesday, according to CoinDesk. He reportedly added that Genesis’ trading and custody services are still fully operational.

A Genesis spokesperson did not immediately respond to a request for comment.

The decision reflects a sign of infection outside BlockFi, which is said to be preparing to file for possible bankruptcy, according to the Wall Street Journal. The cryptocurrency lender had already halted customer deposit withdrawals and admitted it had “significant exposure” to now-bankrupt cryptocurrency exchange FTX and sister trading firm Alameda Research.

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The paper added, citing people familiar with the matter, that BlockFi is also planning more layoffs as it prepares for a possible Chapter 11 filing, though the company stopped short of saying the majority of its assets are under FTX custody.

A representative from BlockFi did not immediately respond to requests for comment.

FTX filed for Sam Bankman-Fried’s cryptocurrency exchange for Chapter 11 bankruptcy protection In the United States last week, according to a Company statement posted on Twitter. Bankman-Fried also stepped down as CEO and was succeeded by John J. Third Ray, though the outgoing president will stay on to help with the transition.

Nearly 130 additional affiliates are part of the proceedings, including Alameda Research, cryptocurrency exchange Bankman-Fried, and the company’s US subsidiary, FTX.us.

within daysFTX went from a $32 billion valuation to bankruptcy as liquidity dried up, clients demanded withdrawals, and rival exchange Binance ripped apart. Non-binding agreement to buy the company. FTX founder Fred Bankman He confessed In the past week it “faded”.

FTX may have more than 1 million creditors, according to an update Filing for bankruptcy Tuesdayreferring to the massive impact its crash had on cryptocurrency traders.