To allay customer fears, Genesis Trading reassured customers on Twitter that its crypto spot, derivative, and custody business remains operational.
Genesis announcement sparks industry fear
The company said that the default of failed crypto hedge fund Three Arrows forced it to take measures to improve liquidity and de-risk its books. However, the FTX collapse prompted a flurry of withdrawals that challenged its available liquidity.
However, FTX has created unprecedented market turmoil, resulting in abnormal withdrawal requests which have exceeded our current liquidity. — Genesis (@GenesisTrading) November 16, 2022
The company said that it is in consultation with advisors regarding the pausing of withdrawals and will release a plan for the future of its lending business next week.
In light of recent industry events, Twitter users mainly responded negatively to the news, with H.E. Pariston saying that “everyone is going down.”
Everyone is going down. — H.E. Pariston (@miladyenforcer) November 16, 2022
Xenu tweeted that this is just the beginning of the crypto contagion:
The contagion is going to get worse. I can't wait. https://t.co/fxu1fgomb1 failing is around the corner. — xenu (@xenumonero) November 16, 2022
Genesis Global Trading and its crypto lending arm belong to the Digital Currency Group (DCG), the parent company of Grayscale Investments and crypto news outlet Coindesk. Three Arrows Capital had borrowed $2.4 billion from Genesis Asia Pacific before bankrupting earlier this year.
Early predictions suggested that the Digital Currency Group may need to dissolve Grayscale’s GBTC and Ethereum trusts to help prop up Genesis.
We're hearing semi-credible rumors that Genesis may be having solvency issues. They are having a call with their creditors tomorrow at 8 AM EST to explain the situation. If true, they may possibly be dissolving ETHE and GBTC to pay back their lenders. We will know more tomorrow. — Autism Capital
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