Genesis Global Pauses Withdrawals, Gemini’s Earn Program Affected
- Crypto lender Genesis Global has temporarily suspended redemptions and new loan originations as abnormal levels of withdrawals had exceeded the firm’s current liquidity.
- Crypto exchange Gemini revealed that Genesis Global was the lending partner of its Earn program, and that it will not be able to meet customer redemptions within its SLA of 5 days.
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Institutional crypto lender Genesis Global has temporarily suspended redemptions and new loan originations in the lending business as a result of the FTX collapse, which also affected the Gemini exchange, the company said via Twitter on 16 November.
According to the announcement, the decision was made due to the “unprecedented market turmoil” caused by the collapse of crypto exchange FTX, which resulted in abnormal levels of withdrawals that exceeded the firm’s current liquidity. Genesis Global’s liquidity was also negatively impacted by the fall of the Three Arrows Capital (3AC) hedge fund back in June, against which it filed a $1.2 billion claim.
Last week, Genesis Global revealed that it had around $175 million in locked funds in its FTX trading account, and that in response it had acquired a $140 million equity infusion from its parent company Digital Currency Group (DCG). The company also claimed that its spot, derivatives trading, and custody businesses will remain “fully operational” as Genesis Trading — which acts as Genesis Global Capital’s broker/dealer — was independently capitalized and operated separately from the lending unit.
Crypto asset management firm Grayscale — which is also under the DCG umbrella — quickly took to Twitter to assure investors that its operations were not impacted by Genesis Global’s move as it was not a counterparty or service provider to any of its products. Grayscale noted that the assets underlying its Grayscale Bitcoin Investment Trust (GBTC) and all its products were held in “deep cold storage by our custodian Coinbase”.
Cryptocurrency exchange and custodian Gemini, however, revealed that Genesis Global was the lending partner for its Earn program, and that it would not be able to meet customer redemptions within the service-level agreement (SLA) of 5 business days. It also noted that the events had no impact on its other products and services, and that customer fund held on the Gemini exchange were backed 1:1 and available for withdrawal at any time.
- The New York Jurors took 4 fours of deliberating before pronouncing the former FTX CEO guilty of all seven charges of fraud and conspiracy to commit fraud.
- Bankman-Fried will now have to appear in court on 28 March, 2024, where he will face a potential maximum sentence of 115 years in prison.
Former CEO of FTX Sam Bankman-Fried leaves the Federal Court in New York after pleading not guilty, 3 January, 2022.
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- A little over $13 million in altcoins were sent to crypto exchanges Binance and Coinbase in the past 24 hours, which is in accordance with a September court order.
- The court ordered a phased liquidation process, which allows the bankruptcy estate to sell $3.4 billion worth of digital assets over a certain period of time.
- Joseph Pimbley, a member of litigation consulting firm PF2 Securities, will try to rebuff testimonies from Caroline Ellison, Gary Wang, Nishad Singh, and Adam Yedidia.
- During his testimony Pimbley will try to establish a timeline for the FTX-Alameda line of credit, and convince the jury it fluctuated between $1 billion and $3 billion between 2021 and 2022.