Genesis Suspends Withdrawals in Crypto Lending Unit Following FTX Collapse

The lending arm of crypto investment bank Genesis Global Trading is temporarily suspending redemptions and new loan originations in the wake of FTX's collapse. Genesis' trading and custody services remain fully operational.

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Genesis is exploring solutions for the lending unit, including finding a source of fresh liquidity.

"Today Genesis Global Capital, Genesis's lending business, made the difficult decision to temporarily suspend redemptions and new loan originations. This decision was made in response to the extreme market dislocation and loss of industry confidence caused by the FTX implosion," said Amanda Cowie, vice president of communications and marketing at DCG.

"This decision impacts the lending business at Genesis and does not affect Genesis's trading or custody businesses. Importantly, this decision has no impact on the business operations of DCG and our other wholly owned subsidiaries," Cowie added.

The decision follows a punishing period for the industry after this month's implosion of Sam Bankman-Fried's crypto companies FTX and Alameda Research.​ FTX's fall had spurred withdrawal requests that exceeded Genesis' current liquidity.

Last week, Genesis disclosed that its derivatives unit had about $175 million in locked funds in its FTX trading account. As a result, DCG opted to strengthen Genesis' balance sheet with an equity infusion of $140 million.

Genesis suffered major losses earlier this year due to the failure of hedge fund Three Arrows Capital (3AC).

Source: CoinDesk