Genesis Global Trading Suspended Customer Withdrawals As Affected By FTX Crisis
Following the collapse of FTX, the lending division of cryptocurrency investment bank Genesis Global Trading has temporarily stopped accepting redemptions and initiating new loans, Interim CEO Derar Islim informed customers in a call on Wednesday.
According to Islim, Genesis Trading, which serves as Genesis Global Capital‘s broker-dealer, is independently funded and run by that loan arm. Genesis’ custody and trading services are still fully functional.
On the company’s website, Genesis Global Capital is said that cater to institutional clients and had $2.8 billion in total active loans at the end of the third quarter of 2022.
The decision comes after a trying time for the sector following this month’s collapse of Sam Bankman-Fried’s crypto companies, FTX and Alameda Research. Islim claimed that withdrawal requests following FTX’s sharp decline had surpassed Genesis’ available liquidity.
Genesis revealed last week that the $175 million in locked funds in its FTX trading account belonged to its derivatives unit. In order to strengthen Genesis’ balance sheet, DCG decided to inject $140 million in additional equity.
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