Cryptocurrency lender Genesis Global Capital has paused withdrawals and mortgage purposes 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 because the dealer arm of Genesis Capital and is independently operated and capitalized from the broader lending establishment, interim CEO Derar Islim mentioned. However, Islim did state that buying and selling operations and custody companies presently stay operational.
“Today Genesis Global Capital, Genesis’s lending enterprise, made the troublesome resolution to quickly droop redemptions and new mortgage originations,” mentioned Amanda Cowie, vice chairman of communications and advertising and marketing at Digital Currency Group (DCG), father or mother firm of Genesis.
Islim additionally defined that Genesis was actively in search of options for its liquidity crises and could be in search of 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 mentioned.