- Genesis has suspended withdrawals from its lending arm and has cited abnormal withdrawal requests.
- The company revealed that its trading and custody businesses remained completely operational.
- The derivatives business of Genesis had $175 million in locked funds on its FTX account.
In a recent announcement, it was revealed that Genesis paused withdrawals from its lending arm on Wednesday, citing abnormal withdrawal requests. Genesis, the leading crypto lender tried to raise a $1 billion fund from investors in order to avoid a liquidity crunch steered by the collapse of a crypto exchange FTX.
The document addressed that there is an ongoing run on deposits steered majorly by Genesis partners and retail programs and institutional clients testing liquidity. The company revealed that its trading and custody businesses remained completely operational.
In addition to this, it should be noted that the lender also tweeted that its derivatives business had $175 million in locked funds on its FTX account. However, it should be noted that this won’t impact its market-making activities.
As revealed, Genesis is still reeling from the disintegration of Three Arrows Capital (3AC), with the company stating the $2.3 billion owed by the ex-crypto hedge fund negatively affected the lending arm’s liquidity.
Genesis has recently joined the growing list of crypto companies that are impacted by the collapse of the crypto exchange FTX earlier this month. Sam Bankman-Fried, the Founder of the company filed for Chapter 11 bankruptcy last week, and as per the reports, he owes money to more than a million creditors.
This week witnessed the paused withdrawals of Liquid Global, the crypto exchange owned by FTX and SALT crypto lender. In addition to this, it was revealed that the firm was mulling bankruptcy after going through notable exposure to the FTX exchange.