CEO Genesis Trading Derar Islim told customers on a call that the company would suspend withdrawals and new loan originations due to impacts of the recent FTX crash and the collapse of Three Arrows Capital in mid-2022.
Genesis Trading is a subsidiary of Genesis Global, a well-known crypto lender that manages assets worth up to $2.8 billion as of the end of Q3 2022. Even so, Derar Islim stated that Genesis Trading only works as a broker/lender and is independently capitalized and operated from the rest of the parent company.
Notably, Genesis Global is under the management of Digital Currency Group, which is also the parent company of CoinDesk. It is funny that it was CoinDesk who published an article, pointing out that Alameda Research, Bankman-Fried’s hedge fund, held an outsized amount of FTT on its balance sheet. And that was one of the main reasons why FTX was found to be facing a major cash shortage and then collapsed in just 1 week.
Two other companies of Digital Currency Group, Grayscale and Foundry, said they were not affected by Genesis. Crypto exchange Binance also denied its involvement with Genesis. Genesis Trading previously admitted to being stuck up to $175 million on FTX at the time the exchange went bankrupt, forcing it to ask the parent company for an emergency injection of $140 million to maintain its operations.
Since Genesis Trading is temporarily paused, Earn program of the Gemini exchange also had to suspend withdrawals. However, Gemini still claims to trust Genesis to do whatever it takes to fulfill their obligations.
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