Renowned crypto brokerage company Genesis Global Trading has halted lending withdrawals due to the recent FTX situation. Company officials stated that the liquidity crunch was triggered by clients making significant withdrawals after the FTX collapsed. However, Genesis reported that despite FTX’s demise, the company’s “spot and derivatives trading and custody businesses remain fully operational.”
We recognize how challenging this past week has been due to the impact of the FTX news. At Genesis we are entirely focused on doing everything we can to serve our clients and navigate this difficult market environment.
— Genesis (@GenesisTrading) November 16, 2022
On Wednesday, Genesis announced via Twitter that it had made the “difficult decision” to temporarily restrict withdrawals from its Genesis Global Capital lending platform. The company said that the number of withdrawals was too high for its current cash flow.
Genesis reported abnormal withdrawal requests
It is important to note that after the demise of a once-huge cryptocurrency exchange FTX, Genesis reportedly saw “abnormal withdrawal requests,” prompting the action. The announcement further stated that the company is working to find potential answers to tackle the company’s crisis and sourcing new liquidity. The platform stated:
“We have hired the best advisors in the industry to explore all possible options. Next week, we will deliver a plan for the lending business. We’re working tirelessly to identify the best solutions for the lending business, including among other things, sourcing new liquidity.”
Gemini additionally responded to the impact its actions had on its lending initiative, Gemini Earn. This is due to the fact that Genesis Global Capital is a partner of its Earn platform.
The company expressed its disappointment by stating, “We are disappointed that the Earn program SLA will not be met, but we are encouraged by Genesis’ and its parent company Digital Currency Group’s commitment to doing everything in their power to fulfill their obligations to customers under the Earn program. We will continue to work with them on behalf of all Earn customers. This is our highest priority. We greatly appreciate your patience.”
Notably, on November 13, crypto exchange platform Kraken announced that it has seized all the accounts belonging to FTX and Alameda in order to protect their creditors.
