Wednesday, February 28, 2024

Genesis Lending Platform Cease Customer Withdrawals Amid FTX Slump.

Following the fall of FTX, the financing division of cryptocurrency investment bank Genesis Global Trading has effectively halted accepting withdrawals and initiating new loans, Acting CEO Derar Islim informed clients in a call on Wednesday. Per the company’s website, the division, known as Genesis Global Capital, caters to institutional clients and had $2.8 billion in total active loans at the end of the third quarter of 2022.

According to Islim, Genesis Trading, which serves as Genesis Global Capital’s broker-dealer, is independently funded and run by that loan arm. He continued by saying that Genesis’ custody and trading services are still fully functional.

Islim informed the callers that Genesis is looking into options for the loan segment, including locating a new source of financing. He added Genesis would explain its strategy to clients the following week. 

“Genesis Global Capital, Genesis’ lending division, made the painful choice to halt redemptions and new loan originations temporarily today. This choice was made in response to the FTX implosion’s severe market disruption and loss of industry confidence, “explained Amanda Cowie, DCG’s vice president of marketing and communications.

“Genesis’s trading platform and custodial businesses are unaffected by this ruling, but it has an influence on the financial industry. Moreover, this choice has no bearing on DCG’s or our other fully owned firms’ business operations, “Cowie continued.

Genesis revealed last week that the $175 million in locked assets in its FTX trading account belonged to its derivatives unit. In order to bolster Genesis’ financial statement, DCG decided to inject $140 million in additional shares.

Gemini, the digital currency exchange and custodian that collaborates with Genesis, took notice of the development.

In a statement, Gemini added, “We are collaborating with the Genesis team to assist clients in rapidly redeeming their monies through the earning program. While we are sad that the Earn program’s [service agreement] requirements won’t be completed, we are heartened by Genesis’ and its parent business Digital Currency Group’s commitment to using all reasonable efforts to uphold their commitments to customers under the Earn program.

The stablecoin issuer Tether stated in a blog post on Wednesday that it did not have exposure to either Genesis or Gemini Earn. The corporation stated that “Tether is doing business as usual.”

Cryptured Team
Cryptured Team
The writers team at Cryptured.com is composed of passionate and experienced journalists who cover the latest developments in the crypto and blockchain space. They aim to provide accurate, unbiased and easy-to-understand news and information for their readers, as well as insights and analysis from industry experts. The writers team is always on the lookout for new and exciting stories that can help the general public learn more about the potential and challenges of these technologies.
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