Cryptocurrency Firm Genesis Temporarily Suspends Crypto Lending Services Following FTX Fraud
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The cryptocurrency market has been affected by the controversy of FTX like a domino effect. Another major cryptocurrency exchange to take a hit is Global Capital Genesis. The cryptocurrency enterprise has recently announced that it is halting operations for its lending protocols.
As per the latest announcement, the company is going to put a halt to new loans and consumer redemptions.
According to the management of Genesis, the exchange has decided due to the increasing pressure on account of the FTX decline.
Genesis has shared that the crypto lender started to face issues with maintaining liquidity that was triggered by big players taking off with their reserves to the cold storages.
As per the management of Genesis, the ripple effect of negative developments has also hit the lender in the last few days.
The executive brass of the cryptocurrency organization has recently held a detailed conference call with the institutional clients of Genesis to update them on the matter.
Meanwhile, some media outlets cite anonymous sources to purport that Genesis is functionally insolvent. It is important to mention that Genesis depends on three major ways of conducting business, first derivatives, second lending, and third custodial services.
Thus far, the crypto organization has only halted its lending/borrowing wing while spot/derivatives and custody services remain fully functional.
Genesis Provides Lending Support to Major Cryptocurrency Organizations
The biggest stakeholder of Genesis, Digital Currency Group has recently tweeted that the trading and custodial services are active as usual.
However, Coindesk and Blockworks have noted that Genesis provided lending support to other cryptocurrency exchanges such as Gemini Earn that offer up to 8.05% interest on crypto staking.
Following Genesis’s announcement, Gemini Earn has also declared that it has stopped the new earn redemptions from this point onward.
However, Gemini Earn has also maintained that the service would be reactivated after an interval. At present, cryptocurrency enterprises are determined to manage their operations in a manner to prevent bankruptcy.
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