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Genesis Suspending Client Withdrawals for Lending Arm Citing ‘FTX Impact’

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On Wednesday morning, Genesis announced to clients that it would pause withdrawals from its lending arm, citing “unprecedented market turmoil” due to crypto exchange FTX.

“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,” the firm wrote.

The news comes amid the collapse of crypto exchange FTX, of which Genesis’ derivatives trading arm also revealed roughly $175 million in exposure.

“Our operating capital and net positions in FTX are not material to our business. Circumstances surrounding FTX have not impeded the full functioning of our trading franchise,” the firm tweeted on November 10.

A day later, the crypto broker’s parent company Digital Currency Group (DCG) said that it would be stepping in to provide Genesis with $140 million in equity.

Genesis did not respond immediately to Decrypt‘s request for comment.

The move is just the latest fallout from the FTX contagion. Once a starlet of the crypto bull run, the crypto exchange filed for Chapter 11 bankruptcy last Friday.

There are reportedly over one million creditors that have been listed in the filing.

This story is breaking and will be updated soon.

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