Genesis, a global leader in institutional digital asset trading, lending, derivatives, custody and prime brokerage services, suspended customer withdrawals. The crypto lending unit also had tried to get a $1 Billion loan from investors before halting withdrawals.
According to its official website, Genesis Global Capital, serves an institutional client base and had $2.8 Billion in total active loans as of the end of the third quarter of 2022.
An Update from Genesis Trading
Due to the impact of the FTX collapse, Genesis Trading has recognized new challenges. It added that they will navigate the difficult market environment.
In a twitter thread, shared on November 16, 2022, the crypto trading unit added that its spot and derivatives trading and custody businesses remain fully operational. Also, it will provide complete support to its clients who rely during volatile market conditions for managing risk and executing their business strategies.
GenesisTrading emphasized that Genesis Global Trading, its broker/dealer that holds its BitLicense, is independently capitalized and operated – and separate from all other Genesis entities.
The crypto brokerage added that the default of prominent crypto hedge fund, Three Arrows Capitals or 3AC, on a loan for more than $670 Million, negatively impacted the liquidity and duration profiles of Genesis’s lending entity Genesis Global Capital. Since then, it has been de-risking the book and shoring up its liquidity profile and the quality of its collateral.
All the same time, FTX has created unprecedented market turmoil, resulting in abnormal withdrawal requests which have exceeded Genesis’s current liquidity.
The crypto brokerage assured that its first priority is to serve its clients and preserve their assets. Therefore, in consultation with its professional financial advisors and counsel, it has taken the difficult decision to temporarily suspend redemptions and new loan originations in the lending business.
While, with the best industry experts and advisors the brokerage firm will explore every possible option.
Genesis added that in the coming week, it will deliver a plan for the lending business. As they are working tirelessly to identify the best solutions for the lending business, including among other things, sourcing new liquidity.
Additional Updates After FTX Collapse
On November 11, 2022, Genesis Trading gave the information that the Genesis derivatives business currently has around $175 Million in locked funds in its FTX trading account and it does not impact on its market-making activities.
Furthermore, its operating capital and net positions in FTX are not material to its business. Circumstances surrounding FTX have not impeded the full functioning of its trading franchise.
Genesis also printed record volumes in the previous week, and maintained leading market share, and provided support to its clients with its ongoing derivatives needs. It re-emphasizes that Genesis has no ongoing lending relationship with FTX or Alameda.
Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.
Source: https://www.thecoinrepublic.com/2022/11/18/how-genesis-trading-is-navigating-with-current-market-conditions/