“We have made the difficult decision to temporarily suspend repayments and new loan originations in the lending business. We are working diligently to shore up the liquidity needed to meet our loan clients’ obligations“a Genesis spokesperson said in a statement.
Genesis parent Digital Currency Group, an investor who also owns crypto asset manager Grayscale, said on Twitter that the decision to suspend redemptions “was made in response to extreme market dislocation and loss of confidence in the sector caused by FTX implosion”.
The suspension at Genesis “has no impact on the business operations of DCG and our other subsidiaries,” Digital Currency Group said.
In the past week, Genesis said its derivatives business had approximately $175 million in funds locked up on FTX.
Joseph Edwards, investment partner at Securitize Capital, said: “This should not be seen as a step forward, but rather a step down, as Genesis has a significant number of regulated counterparties. The discomfort will be felt among the OTC offices. (OTC) in Europe and North America in particular”.
FTX drop
Genesis is not the only company to have been affected by the FTX crash, which caused upheaval throughout the cryptocurrency industry, with many asset managers and brokerage firms exposed to the stock market in some way.
The cryptocurrency lender BlockFiwhich previously acknowledged that it has significant exposure to FTX, plans to lay off workers while it prepares to file for bankruptcy, the Wall Street Journal reported Tuesday.
US court files show that Sam Bankman-Fried, founder of FTX, is being sued by investors who allege that the cryptocurrency accounts with returns from the company violated Florida law.
The proposed class action lawsuit, filed late Tuesday in Miami, alleges that the FTX-performing accounts were unregistered securities that were being sold illegally in the United States.
It is also seeking damages from several celebrities who allegedly helped promote FTX, including National Football League quarterback Tom Brady and tennis star Naomi Osaka.
Representatives for Bankman-Fried, Brady and Osaka did not immediately respond to requests for comment Wednesday.
In that framework, Bitcoin, the world’s largest cryptocurrency, was down 2.6%, at $16,400, with a loss for the month of around 20%.
Source: Ambito
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