Since the first half of 2022, the cryptocurrency market has experienced liquidity issues, making it difficult for businesses to survive. Numerous well-known companies have closed their businesses and filed for bankruptcy, citing various reasons.
FTX, one of the world’s largest cryptocurrency exchanges, was running smoothly, at least to the outside world. SBF’s empire, however, crumbled after the exchange began to encounter liquidity issues.
FTX sent ripples across the cryptocurrency realm, with their actions affecting several firms. One of the recent firms to halt withdrawals, citing the collapse of FTX, is the cryptocurrency lending arm of Genesis.
Genesis suspends withdrawals and new loan originations
Genesis cited abnormal withdrawal requests due to the aftermath of the fall of Sam Bankman-Fried’s cryptocurrency exchange. Derar Islim, the interim CEO of the company, cited that the withdrawal requests exceeded the current liquidity at Genesis.
Islim also stated during a call on Wednesday that the company has hired advisors to explore all the possible options. As of the third quarter of 2022, Genesis Global Capital had $2.8 billion in total active loans. He also added that Genesis’ trading and custody services are fully up and running.
“This decision impacts the lending business at Genesis and does not affect Genesis’s trading or custody businesses. Importantly, this decision has no impact on the business operations of DCG and our other wholly owned subsidiaries,” Amanda Cowie, vice president of communications and marketing at Genesis Digital Currency Group (DCG) stated.
The collapse of FTX has secretly affected several firms in the industry. The cascading effects have not just affected the prices of cryptocurrencies but also those entities associated with FTX. As days pass, the real effects of the fall of other companies are coming more to light.