This is not investment advice. The author has no position in any of the stocks mentioned. Wccftech.com has a disclosure and ethics policy.
The FTX saga is a poisoned gift for the crypto sphere that just keeps on giving. After BlockFi and a host of other crypto firms halted withdrawals over the past few days, the crypto lending firm Genesis has now halted all of the withdrawals at its lending arm.
GENESIS halting withdrawals.
Why does everyone tell us “we’re solvent”, when they aren’t? pic.twitter.com/lFjj6RLfXT
— minigrogu (@minigrogu) November 16, 2022
To wit, the lending arm of Genesis, formally known as Genesis Global Capital, has now suspended all redemptions and loan creations. The firm had $2.8 billion in total active loans at the end of Q3 2022. Last week, Genesis revealed that its derivatives arm had about $175 million in funds that were trapped within the now-defunct FTX.
The owner of Genesis, Digital Currency Group, explained the rationale behind this move in the following words:
“Today, Genesis Global Capital, Genesis’s lending business, made the difficult decision to temporarily suspend redemptions and new loan originations. This decision was made in response to the extreme market dislocation and loss of industry confidence caused by the FTX implosion.”
Meanwhile, the blowback from FTX’s default keeps growing. The crypto hedge fund Ikigai has revealed that the majority of its assets are currently trapped within FTX….
