After the bankruptcy of FTX and its affiliated companies, it stops transactions one by one on all centralized exchanges it infects. A new Bitcoin platform followed the announcement of Liquid Global, which was acquired by FTX.
Another Bitcoin platform stopped its operations after the FTX crisis
Cryptocurrency-focused investment bank Genesis Global Trading has stopped withdrawals after the FTX crash. Interim CEO Derar Islam announced on November 16 that they are temporarily suspending new lending operations following the collapse of FTX. According to the company’s website, Genesis Global Capital currently serves an institutional client base. As of the end of the third quarter of 2022, it has a total of $2.8 billion in active loans. The Bitcoin platform said on November 11 that it had a large amount of funds stuck on FTX:
As part of our goal to provide transparency about market events this week, we currently have ~$175 million in locked funds in our FTX account. This does not affect our market maker activities.
As part of our goal in providing transparency around this week’s market events, the Genesis derivatives business currently has ~$175M in locked funds in our FTX trading account. This does not impact our market-making activities.
— Genesis (@GenesisTrading) November 10, 2022
CEO Derar Islam says Genesis is exploring solutions to find a new source of liquidity. He noted that Genesis plans to detail its clients next week.
The decision comes after the bankruptcy of FTX and Alameda Research
The downfall of Genesis Global Trading came shortly after the collapse of FTX and Alameda Research. The Genesis CEO says FTX’s dramatic bankruptcy has led to withdrawal requests that exceed Genesis’ current liquidity. The platform announced last week that the derivatives unit has approximately $175 million in locked funds in its FTX account. As a result, DCG has chosen to bolster Genesis’ balance sheet with $140 million in equity. The announcement was noted by crypto exchange and custodian Gemini in partnership with Genesis. Genesis spokespersons said in their statement:
We work with the Genesis team to help clients redeem their funds from the Earnings program as quickly as possible. We are disappointed that the Acquisition program [service contract] will not be met, but we are encouraged by the commitment of Genesis and its parent company, Digital Currency Group, to do everything they can to meet their obligations to customers under the Winning program.
1/6 We are aware that Genesis Global Capital, LLC (Genesis) — the lending partner of the Earn program — has paused withdrawals and will not be able to meet customer redemptions within the service-level agreement (SLA) of 5 business days. https://t.co/9e48pF3Ymn
— Gemini (@Gemini) November 16, 2022
Genesis suffered huge losses earlier this year due to the bankruptcy of hedge fund Three Arrows Capital (3AC). The effects of the FTX crisis, which you follow from Kriptokoin.com, are now felt on all platforms that have contact with the stock market. In one of the most recent developments, AAX, a Hong Kong-based global Bitcoin exchange, reported that it was at risk. Earlier in the week, it had stopped withdrawals. The stock market announced that after the FTX crisis, its investors tried to withdraw their capital from the stock market.
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