New York
CNN Business
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The lending arm of crypto brokerage Genesis Global Trading suspended redemptions and new loan originations after an “abnormal” number of withdrawal requests that exceeded its current liquidity, citing market turmoil from the failure of rival FTX.
Genesis said it was working with advisers “to explore all possible options,” adding that it would release a plan for the lending business next week. “We’re working tirelessly to identify the best solutions for the lending business, including among other things, sourcing new liquidity,” the company said.
Genesis’ lending unit had about $2.8 billion in active loans in the third quarter, according to its website.
The suspension comes as the entire crypto industry is on edge following the unraveling of Sam Bankman-Fried’s FTX exchange and Alameda Research hedge fund, both of which filed for bankruptcy late last week.
“This morning is a more alarming crypto news day than FTX bankruptcy day last Friday,” tweeted Daniel Roberts, editor-in-chief of Decrypt Media, on Wednesday.
The speedy and spectacular implosion of FTX, once one of the industry’s biggest players, is raising concerns about contagion within the crypto ecosystem. Some observers have described FTX’s collapse as the “Lehman moment” for crypto, referring to the 2008 implosion of Wall…
