According to the Wall Street Journal, crypto lender Genesis Trading sought to raise up to $1 billion in cash after the decision to block withdrawals on the evening of November 16.
The document viewed by the Journal cites a “liquidity crunch due to certain illiquid assets on its balance sheet” at Genesis.
On Wednesday, Genesis Global Capital suspended customer redemptions in its lending business, citing the sudden failure of Sam Bankman-Fried’s crypto exchange FTX.
“Genesis had been exploring all possible options amidst the liquidity crunch resulting from the FTX news,” the company said in an emailed statement to Reuters, adding that it took the decision to suspend redemptions after reviewing a number of options. According to the Wall Street Journal, Genesis also did not receive any help.
In a notice posted on the evening of November 16, Genesis Trading announced that only their lending unit, Genesis Global, experienced an interruption, other parts of the company were still operating normally. Other companies owned by DCG (Genesis’ parent company), Grayscale investment fund and mining company Foundry are also unaffected.
Earlier, on November 10, Genesis said that it had just $175 million of funds locked with FTX. The company also emphasized that it had “no material exposure” to FTX’s FTT token or any other centralized exchange tokens.
The implosion of FTX has rippled across the industry, hobbling liquidity at firms with exposure to what was once one of the world’s biggest crypto exchanges, and prompting investigations by regulators in several countries.
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