Genesis halts customer withdrawals
The drama surrounding FTX and its ramifications is entering the next round. As interim CEO Derar Islam said in a phone call to clients on Wednesday (November 16), the crypto lending division of crypto investment bank Genesis Global Trading is temporarily suspending repayments and new lending following the collapse of FTX , which was also reported by CoinDesk .
Does that mean the next bad news? The website reveals that the loan institution serves an institutional customer base and had $2.8 billion in active loans at the end of the third quarter of 2022.
Genesis forges liquidity plan for “next week”
Genesis Trading acts as a broker – or if you like as a dealer of Genesis Global Capital. But is in fact independently capitalized and operated separately from the credit department, Islam further assured, adding: “Genesis’ trading and custody services remain fully operational.”
Islam also informed participants on the conference call that Genesis is looking for solutions for the credit department. This meticulous search also includes the search for other sources of new liquidity . More details will follow in the coming week.
Unexpected redemption requests force a decision
The decision undoubtedly follows a rough patch for the industry following the collapse of Sam Bankman-Fried’s crypto company FTX. But why did this decision come explicitly within the bank? Islam also had an answer for this: “The dramatic fall of FTX led to redemption requests that exceeded Genesis’ current liquidity.”
In addition, a statement has already been released on Twitter in which the New York-based financial institution seeks to explain the challenges of the past week caused by the FTX debacle. Genesis suffered large losses earlier this year due to the default of the hedge fund “Three Arrows Capital (3AC)”. The company now faces another major challenge. Nevertheless, they have made it their “top priority” to “serve customers and protect their assets”.
