Defi News- Genesis will go into further depth about its strategy with clients next week.
- Its derivatives division has around $175 million stashed up in its FTX trading account.
On Wednesday, interim CEO Derar Islim said that Genesis Global Trading’s lending division has temporarily halted withdrawals and new loan originations in the aftermath of FTX’s bankruptcy. Genesis Global Capital, the division in charge of servicing institutional clients, has $2.8 billion in outstanding loans as of the end of the third quarter of 2022, as reported on the company’s website.
According to Islim, Genesis Trading, the broker/dealer arm of Genesis Global Capital, has its own capital and is run separately from the lending arm. Furthermore, he said that all of Genesis’ trading and custody services are now running normally.
Withdrawal Demands Amid FTX Fall
Moreover, Islim informed the participants that Genesis is looking at options for the lending business, such as identifying a new source of financing. According to him, Genesis will go into further depth about its strategy with clients next week.
After the downfall of Sam Bankman-Fried’s firms FTX and Alameda Research this month, the decision comes after a trying time for the sector. Islim said that the precipitous decline of FTX had resulted in withdrawal demands that far outpaced Genesis’ liquidity.
Genesis revealed last week that its derivatives division has around $175 million stashed up in its FTX trading account. Therefore, DCG decided to inject $140 million in equity into Genesis to bolster its financial position.
Gemini, a crypto exchange and custodian that is partnered with Genesis, took notice of the development. Moreover, early this year, Genesis lost a lot of money since the hedge firm Three Arrows Capital collapsed (3AC).
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Source: https://thenewscrypto.com/crypto-lending-arm-of-genesis-suspends-withdrawals/