Genesis' lending arm temporarily halts redemptions and new loan originations
The lending arm of cryptocurrency investment bank Genesis Global Trading has temporarily halted redemptions and suspended new loan originations following the collapse of Bahamas-based crypto exchange FTX.
Genesis Global Capital, which had $2.8bn in total active loans at the end of the third quarter, said it was exploring fresh solutions for its lending wing - including finding a source of new liquidity. The group hopes to detail its plans to clients before November 25.
"This decision was made in response to the extreme market dislocation and loss of industry confidence caused by the FTX implosion," said Amanda Cowie, vice president of communications and marketing at Genesis' parent company, Digital Currency Group.
"This decision impacts the lending business at Genesis and does not affect Genesis's trading or custody businesses. Importantly, this decision has no impact on the business operations of DCG and our other wholly owned subsidiaries," Cowie added.
Genesis' decision comes a week after it disclosed that its derivatives unit had roughly $175.0m in funds locked in a trading account at FTX and opted to strengthen its balance sheet with an equity infusion of $140.0m.
Reporting by Iain Gilbert at Sharecast.com