Trade management platform and cryptocurrency exchange Genesis made an announcement that frightened its users. Accordingly, the Blockchain-based platform announced that it is experiencing intense liquidity shortages. He then told his users that it might take several weeks for withdrawals to resume. These developments have made crypto investors wonder if a new wave of bankruptcies and grievances has followed FTX.
This cryptocurrency platform could be the new FTX
Genesis Trading, which is in the midst of difficult conditions related to the liquidity crisis, made a new announcement to its customers today. Derar Islam, the company’s interim CEO, sent an email to Genesis customers. In that email, he explained that lifting the withdrawal ban could take ‘weeks’ instead of days. Earlier, it was reported that Genesis owed approximately $900 million to users of Gemini exchange. Overall, the situation remains complex given that many companies are linked to FTX funds. Now customers are wondering if a new FTX case is coming.
“Genesis Trading estimates that it will take weeks rather than days to get a path forward.”
In its latest announcement with customers, Genesis underlined that it may take additional time to resolve the liquidity issue. The CEO’s Email also said that Genesis was committed to being as transparent with customers as possible. It was also stated that efforts are underway to resolve the problem with the help of consultants. Genesis Trading halted withdrawals after news of significant liquidity crunch at FTX, headed by Sam Bankman-Fried. This was just one of the platforms affected in the cryptocurrency market following the collapse of FTX.
Genesis Trading tries to settle with creditors
In November, Genesis’ lending arm was forced to suspend withdrawals following the collapse of crypto exchange FTX. Genesis Trading has since been trying to raise capital and reach a settlement with creditors. The brokerage firm also enlisted investment bank Moelis & Company to explore options, including a potential bankruptcy. This led to speculation that some sort of solution might soon be available. The CEO’s Email today also emphasized this collaboration.
Derar Islam, who assumed the role of interim CEO, said the company would be “as transparent as possible”. Then, he stated that they work with highly experienced consultants. Meanwhile, Genesis Trading is working closely with the Digital Currency Group (DCG). Additionally, Islam noted that its trading and custody services are fully operational. However, his statement that withdrawals would take weeks instead of days triggered a panic among investors. As we reported as Kriptokoin.com, the bankruptcy of FTX has caused many cryptocurrency platforms, including BlockFi, to stop withdrawals.
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