Genesis has stopped both debt repayments and new loan issuances, according to a statement from CEO Derar Islim today. The withdrawal requests surpassed the available liquidity at Genesis Global Capital. The cryptocurrency lending division has hired advisors to look at all the possibilities.
With the revelations concerning Genesis today, Tether swiftly stated that it had essentially no exposure to Genesis or Gemeni Earn.
According to Tether, the properties supporting its reserves outweigh the liabilities, and those reserves fully back the tokens. The company asserts that its portfolio, which consists of cash, cash equivalents, and US treasuries, is solid, conservative, and liquid. Tether will keep emphasizing protecting those reserves.
“At this point, it is crucial to emphasize that these reserves have shown to be reliable, consistently displaying resilience during the unfortunate occurrences that have plagued the market this past year.”Said Tether.
Tether says business is as usual and will keep doing so by prioritizing their clients.
Reason for the halted withdrawals
Genesis Global Capital announced today that it would suspend withdrawals on its lending platform, which is what caused delays and uncertainty. This is understandable since FTX has been a victim of its ambitions.
Genesis provides support for the cryptocurrency firm’s Earn offering, enabling users to generate a return on idle cryptocurrency deposits. Rates vary from cryptocurrency to cryptocurrency but can be as low as 4.5% and as high as 8%.
According to the exchange’s help page:
“Gemini is collaborating with accredited third-party borrowers, which include Genesis, who are assessed through a risk assessment process and evaluate our partners’ collateralization management process.”
The financing partner of the Earn program, Genesis Global Capital, LLC (Genesis), has suspended disbursements and will not be able to fulfill client repayments within the service-level agreement (SLA) of five business days, according to Gemini’s statement.
The notice also stated that the cryptocurrency exchange was operating “as swiftly as possible” to refund user monies from its Earn program. The change “does not affect any other Gemini goods or services,” according to Gemini.
The actions taken by Genesis and Gemini today are simply the most recent example of the continued effects of the Sam Bankman-Fried-led FTX Exchange’s demise.
The aftermath of FTX’s Collapse
FTX’s collapse has left several trading desks and investment organizations high and dry and numerous lending organizations stopping withdrawals.
On Tuesday, an investment company focused on cryptocurrencies, Sino Global, disclosed that it had ‘mid-seven figures’ in exposure to the platform. Ikigai, a similar company, announced that it had lost the rights to a ‘vast percentage’ of its investments listed on FTX.
Genesis, too, had heavily invested in FTX
On early Friday, 11th November 2022, the Genesis platform reported that it had around $175 million stuck on its FTX trading account. Genesis’ statement was released via a Twitter thread describing how the company was doing well despite the bizarre occurrences happening on one of the top exchanges for virtual currencies, FTX.
Genesis claimed that one of its goals and standards was to be as honest as possible with the cryptocurrency community; as a result, it felt it was important to disclose the frozen assets.