Genesis Halts Crypto Lending, Blames ‘FTX Implosion’ – Blockworks
November 16, 2022, 8:27 am EST
The lending division of cryptocurrency asset manager Genesis moved Wednesday morning in New York to put a halt to customer redemptions and new loan originations.
The decision stemmed from the building fallout of FTX’s collapse. Reverberations started with broader exchange liquidity issues triggered by a rush by big-money traders to take their digital assets off of exchanges in favor of safer cold-storage solutions. Now, industry participants told Blockworks, the FTX contagion is spreading to crypto credit markets.
Genesis executives told institutional clients on a call Wednesday morning, according to a source familiar with the matter. Another source last week told Blockworks Genesis was “functionally insolvent.”
A spokesperson for Genesis did not immediately respond to a request for comment. Sources were granted anonymity to discuss sensitive business dealings.
Venture capital firm DCG, the company’s main backer, wrote in a series of tweets Wednesday morning that the custody and trading arms of Genesis have not been affected.
“This decision was made in response to the extreme market dislocation and loss of industry confidence caused by the FTX implosion,” the company said.
CoinDesk first reported the news of the halt to the crypto firm’s credit facilities.
This id a developing story. It will be updated.
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