Genesis, a cryptocurrency lending company, has announced that it will no longer accept incoming withdrawal requests from clients.
The cryptocurrency lending company Genesis provided the following information about its operations and alluded at its future plans: “At Genesis we are entirely focused on doing everything we can to serve our clients and navigate this difficult market environment.”
We recognize how challenging this past week has been due to the impact of the FTX news. At Genesis we are entirely focused on doing everything we can to serve our clients and navigate this difficult market environment.
— Genesis (@GenesisTrading) November 16, 2022
The company is one of several that have been impacted by the filing for bankruptcy protection in the United States and is a casualty of the demise of the cryptocurrency exchange FTX.
The cryptocurrency market was caught off guard by FTX’s fall. Sam Bankman-Fried, the former CEO of FTX, was well-known in the sector and frequently socialized with influential leaders, celebrities, and legislators.
The valuation of the cryptocurrency market and the numerous FTX-backed enterprises that lack a clear vision for the future both indicate the ripple effects of its collapse that are still felt throughout the emerging industry.
These industries cover their products for spot trading and financial derivatives. Genesis says that some segments of the business are still active in this situation. The firm asserted: “We continue to support our clients who rely on us during volatile market conditions to manage their risk and execute on their business strategies.”
Genesis Global Trading, the broker of Genesis, is also said to be untouched by the current developments and to be functioning apart from other entities of Genesis. The business and its segment have experienced contagion twice already in 2022.
Three Arrows Capital (3AC), a cryptocurrency hedge fund, failed early in 2022. The collapse of this firm had an adverse effect on Genesis’ liquidity status of the lending protocol.
“FTX has created unprecedented market turmoil, resulting in abnormal withdrawal requests which have exceeded our current liquidity. Our #1 priority is to serve our clients and preserve their assets. Therefore, in consultation with our professional financial advisors and counsel, we have taken the difficult decision to temporarily suspend redemptions and new loan originations in the lending business,” said the crypto-lending company.
The firm says it is collaborating with specialists to offer clients a solution, which might involve finding additional liquidity down the road. Based on the release, the firm will outline a strategy the following week.