Genesis Global, the institutional crypto lender, said it would “temporarily suspend redemptions and new loan originations in the lending business.” In explaining the decision, the firm cited “unprecedented market turmoil” related to the collapse of embattled cryptocurrency exchange FTX, resulting in “abnormal” levels of withdrawals that Genesis Global claims have exceeded its current liquidity.
Jason Yanowitz, founder of Blockworks, writes a long Twitter thread on the impact of any potential Genesis fallout:’’If this is really the end for Genesis, this could be more impactful than FTX.
FTX hurt liquid funds and consumers. Genesis impacts nearly every company in crypto. Genesis started as the first OTC Bitcoin desk in 2013. They’re now crypto’s largest lending desk’’.He wrote.
Genesis is part of DCG, Barry Silbert’s holding company that owns CoinDesk, Foundry, Genesis, Grayscale, and Luno. DCG also runs a huge VC firm. Genesis was expanding at the peak of the market. Q4 2021 numbers were as follows: $50 billion in loan originations, $12.5 billion in active loans, $31 billion in spot volume traded, and $21 billion in derivatives traded.
Genesis was the biggest creditor to 3AC having lent them a whopping $2.4 billion. Genesis then filed a $1.2 billion claim against 3AC. DCG its parent company stepped in and assumed the $1.2 billion claim, leaving Genesis with no outstanding liabilities tied to 3AC.
Genesis also had large exposure to Babel Finance, the CeFi platform that got hit hard in the June unwind. By Q3 2022, their numbers had fallen drastically to $8.4 billion in loan originations, $2.8 billion in active loans, $18.7 billion in spot volume traded, and $9.6 billion in derivatives traded.
Lark Davis, Crypto Lark believes the impact might be huge, ‘’Genesis, A subsidiary of DCG (owners of Grayscale bitcoin Trust), has halted withdrawals! They were the biggest BTC OTC desk and lender in crypto. The impact of this could be HUGE’’
Bitcoin was trading down 2% at $16,530 alongside several assets following the news.
The official FTX Twitter account has shared a statement from John Ray, Chief Restructuring Officer and CEO of @FTX_Official, regarding FTX founder Sam Bankman-Fried’s recent public statements: ‘’As previously announced, Mr. Bankman-Fried resigned on November 11 from FTX_Official, FTX US, Alameda Research Ltd. and directly and indirectly, owned subsidiaries. Mr. Bankman-Fried has no ongoing role at FTX_Official, FTX US, or Alameda Research Ltd. and does not speak on their behalf’’.
The collapse of the FTX exchange and the crypto empire that former CEO Sam Bankman-Fried (SBF) built unfolded over the past week. On November 14, Bankman-Fried started tweeting cryptic messages that infuriated fans. Bankman-Fried has frequently utilized Twitter to update users on FTX and current developments.
Following the initial “What” tweet, which he followed with one-letter tweets spaced out by hours, Crypto Twitter became angered by the bizarre chain of tweets. Eventually, his messages spelled out: “What HAPPENED.”
In the end, Bankman-Fried provided some explanation for his tweets by claiming that his top priority going forward was to restore his customers’ “wholeness.” He continued: “Truth and Beauty,” he added as a final, mysterious remark before signing off.
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