The crypto lending portion of Genesis Global Trading announced they would be halting withdrawals in the wake of the « extreme market dislocation and loss of industry confidence caused by the FTX implosion ». On Twitter, they wrote that « FTX has created unprecedented market turmoil, resulting in abnormal withdrawal requests which have exceeded our current liquidity. »
They urged in their announcement that the decision would not impact their trading or custody businesses—though if I was a user of their other services I might not be feeling so reassured given crypto companies’ poor track record of segregating operations.
Genesis has about $2.8 billion in total active loans as of the end of September 2022.
This is not the first crisis for Genesis this year. The firm lost hundreds of millions due to exposure to the Three Arrows Capital collapse, and in August announced layoffs of 20% of their employees.