Crypto brokerage firm Genesis Global Trading has paused withdrawals for its lending business, which has been impacted by the FTX crisis.
The company blamed large withdrawals from customers due to the FTX collapse for its liquidity crisis.
- In a tweet thread on Wednesday (November 16, 2022), Genesis announced that the company has taken the “difficult decision” of halting withdrawals on its lending platform, Genesis Global Capital.
- According to Genesis, the move came after the brokerage firm noticed “abnormal withdrawal requests”, following the collapse of former crypto exchange giant FTX. The company noted that the massive withdrawals surpassed its current liquidity.
Our #1 priority is to serve our clients and preserve their assets. Therefore, in consultation with our professional financial advisors and counsel, we have taken the difficult decision to temporarily suspend redemptions and new loan originations in the lending business.
— Genesis (@GenesisTrading) November 16, 2022
- Meanwhile, the impact of FTX’s downfall seemed to only affect its lending platform, with Genesis stating that the firm’s “spot and derivatives trading and custody businesses remain fully operational.”
- Genesis also mentioned that it is exploring solutions, one of which is getting fresh liquidity.
“We have hired the best advisors in the industry to explore all possible options. Next week, we will deliver a plan for the lending business. We’re working tirelessly to identify the best solutions for the lending business, including among other things, sourcing new liquidity.”
- Gemini also reacted to the impact of Genesis’ actions on its lending program, Gemini Earn. This is because Genesis Global Capital is a partner of its Earn platform.
“We are disappointed that the Earn program SLA 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. We will continue to work with them on behalf of all Earn customers. This is our highest priority. We greatly appreciate your patience.”