The aftermath of FTX’s collapse seems to be slowly but surely set in motion. Earlier you could read that crypto lending platform BlockFi had paused its withdrawals due to significant exposure to FTX. Now a new name can be added to the list, as Genesis Global Capital is discontinuing the ability to withdraw funds from the platform.
The FTX debacle continues
Genesis Global Capital is the crypto lender of Genesis. The platform targets corporate clients and had $2.8 billion in loans outstanding at the end of the third quarter in 2022, according to the company’s website.
Amanda Cowie, Vice Director of Communications, explains:
“Today, Genesis Global Capital, the lender of Genesis, made the difficult decision to temporarily suspend repayments and new loans. This decision was made in response to the extreme market disruption and loss of confidence in the industry due to the FTX implosion.”
Genesis Trading, which acts as broker of Genesis Global Capital, is independently capitalized and operated separately from the lending platform. Genesis trading and custody services will remain fully operational. Parent company Digital Currency Group (DCG) registered this a series of tweets.
Genesis is currently looking at solutions to its current problems, including finding a new source of liquidity. Genesis hopes to be able to provide a plan to its customers next week.
Gemini in trouble?
Crypto exchange Gemini is linked to Genesis, via Gemini Earn. Here, customers could get up to 8.05% interest on their cryptocurrencies. The crypto exchange has indicated that stopping withdrawals will not affect other Gemini services. In a series of tweets the exchange indicates the following:
This does not affect other Gemini products and services. Gemini is a full-reserve exchange and custodian. All client funds on the Gemini platform are held 1:1 and can be withdrawn at any time.”