Genesis Global Capital Temporarily Suspend Withdrawals and New Loans Following FTX Bankruptcy.
The lending business at Genesis Trading, one of the largest crypto lending institutions, has temporarily suspended withdrawals and new loans.
Working to find solution
According to the company’s website, Genesis Global Capital serves an institutional client base and had active loans totaling $2.8 billion at the end of the third quarter of 2022.
“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,” said Genesis on Twitter.
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
During a Wednesday call with clients, Genesis said it was searching for solutions to its lending business and would present proposals next week.
“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,” cited the tweets.
Genesis trading and custody services is still operate as usual
The company said Genesis Trading, which acts as Genesis Global Capital’s broker/dealer, is separately capitalized and operated from its lending unit, and that it continues to provide trading and custody services.
“Genesis’s spot and derivatives trading and custody businesses remain fully operational. We continue to support our clients who rely on us during volatile market conditions to manage their risk and execute on their business strategies,” said the firm.
The firm added, “We would like to emphasize that Genesis Global Trading, our broker/dealer that holds our BitLicense, is independently capitalized and operated – and separate from all other Genesis entities.”
The announcement has drawn the attention of the crypto community, some of them accusing the firm of going bankrupt.
Story went went from “we’re fine” to “we don’t have the money” pretty darn fast. Should have came clean sooner.
— Buythedip (@jaredthetrader) November 16, 2022
“Story went went from “we’re fine” to “we don’t have the money” pretty darn fast. Should have came clean sooner,” said one twitter user.