Genesis stops withdrawals at lending companies

Gemini users can’t withdraw assets as FTX contagion spreads

Genesis Global Capital, the lending arm of leading digital asset broker Genesis Trading, announced on Wednesday that it has halted withdrawals and new lending due to “unprecedented market turmoil” created by the FTX collapse. .

Withdrawal requests have exceeded the company’s reserve of liquid assets, it said.

This decision does not affect the operations of Genesis’ trading and custody businesses, nor Genesis Global Trading, its New York-licensed brokerage/dealer unit.

The announcement is the latest sign of contagion after FTX’s rapid collapse, and the fallout has already affected a partner company.

Gemini suspends withdrawals from the Earn program

Crypto exchange Gemini offers an “Earn” program that deploys its assets through the Genesis lending business. Shortly after Genesis’ announcement earlier today, Gemini confirmed that customers using the Earn program would not be able to withdraw their funds.

Gemini did not disclose the amount of its exposure to Genesis, but the Earn program once held $3 billion in crypto assets, according to an August 2021 blog post.

“We are disappointed that the Earn program [agreement] will not be satisfied, but we are encouraged by the commitment of Genesis and Digital Currency Group to do everything in their power to fulfill their obligations to customers under the Earn program,” Gemini said in a statement. .

It should be noted that the program’s terms of service state that users may find themselves without recourse if Genesis does not repay its loans.

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