Genesis Asks Users for More Time to Achieve Financial Instability

Derar Islim, interim CEO of crypto brokerage Genesis Global Trading, noted that the company needs more time to cope up with financial instability following withdrawals stoppage in November 2022.

Islim’s letter to Genesis users

Yesterday, Islim wrote a letter to Genesis’s clients: “While we are committed to moving as quickly as possible, this is a very complex process that will take some additional time,” he added “As a key element in this process, we have made significant progress in refining our business plans for Genesis’ client offerings.”

Previously, Islim had informed customers of the temporary suspension of withdrawals and new loans, due to FTX led market turmoil. Genesis’s lending arm, Genesis Global Capital reported $2.8 billion in total active loans in Q3 of 2022, according to its official website.

Genesis, serves as a sister company to crypto investment firm Grayscale, under its parent company Digital Currency Group (DCG). Also, the officials informed that they have hired Moelis & Co. “to evaluate the best possible asset preservation strategy and effectuate a roadmap,” according to Bloomberg.

All-open ‘Publically’

Crypto exchange Gemini’s co-founder Cameroon Winklevoss recently accused DCG founder and CEO Barry Silbert of “bad faith stall tactics.” Genesis is the primary partner of Gemini Earn. Winklevoss alleged that the crypto broker owed more than $900 million to over 340,000 Gemini Earn users and demanded a “consensual resolution” soon.

In an open letter to Silbert being posted on Twitter, Winklevoss: “Barry — today marks 47 days since Genesis halted withdrawals. I am writing on behalf of more than 340,000 Earn users who are looking for answers.”

“To be clear, this mess is entirely of your own making, Digital Currency Group (DCG) — of which you are the founder and CEO — owes Genesis (its wholly owned subsidiary) ~$1.675 billion. This is money that Genesis owes to Earn users and other creditors,” he added.

Genesis financial troubles arose from funds locked in FTX trading account. Genesis had $175 million locked in FTX and has not been able to lay its hands on that money since the bankrupt exchange filed for bankruptcy. In a letter written by Islim on December 7, 2022, he stated that financial healing “will take additional weeks rather than days for us to arrive at a path forward.”

“We believe our continued focus on further sharpening our business will move us in the right direction as we begin the new year, as well as providing more options for working out the lending business,” interim CEO added.

Andrew is a blockchain developer who developed his interest in cryptocurrencies while his post-graduation. He is a keen observer of details and shares his passion for writing along with being a developer. His backend knowledge about blockchain helps him give a unique perspective to his writing