Genesis Global halted withdrawals following ‘unprecedented market volatility.’

Genesis Global, a crypto lending firm, announced plans to suspend redemptions and new loan applications on Nov. 16.

We recognize how challenging this past week has been due to the impact of the FTX news. At Genesis we are entirely focused on doing everything we can to serve our clients and navigate this difficult market environment.

— Genesis (@GenesisTrading) November 16, 2022

Genesis Global halted withdrawals due to the FTX issue

Genesis Global credited its selection of particular markets in part to various events that drove them into the market. One such event was the difficult disappearance of Bitcoin Exchange FTX, which caused Genesis Global to request heightened withdrawal options.

The consultancy stated it has suffered liquidity upkeep because of the aftermath of the collapse of hedge fund Three Arrows Capital in June. As part of bankruptcy proceedings, the brokerage filed a $1.2 billion claim against Three Arrows Capital.

Following the recent reports that Genesis Global’s liquidity levels were unclear, the company had $175 million in funds stuck on FTX. In response, the company that stands for Genesis Global overrode its disapproval of Digital Currency Group’s emergency injection of $140 million.

The transfer was not sufficient to correspond with customer withdrawal demands. Going forward, Genesis Corp. stated:

“We have hired the best advisors in the industry to explore all possible options. Next week, we will deliver a plan for the lending business. We’re working tirelessly to identify the best solutions for the lending business, including among other things, sourcing new liquidity.”

Genesis Global also stated that it regarded its spot, derivatives trading, and custody businesses to be currently operational. It declared this in its most recent quarterly report. Since the announcement, its parent company, Digital Currency Group, clarified that the company has no influence on its operations.

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Despite the Grayscale Global Trust offering trading at a discount, its investments currently stand at nearly $39 not including its endowment fund, which was lately summarized at $6.7 billion at the time of publication. Investors mistake the trust’s record with the Autopilot Investment company for exposure to the Genesis Global company.

The value of Grayscale’s stock has fallen approximately 81% year-to-date according to market data.