•Genesis, a crypto lender, pauses withdrawals after FTX’s collapse drives “abnormal withdrawal requests.”
• According to the Wall Street Journal, Genesis tried to raise a $1 billion loan from investors to avoid the liquidity crunch.
• The company said that it needed the credit by 10 am this past Monday, but didn’t receive it.
• On Wednesday morning, Genesis then announced it would suspend withdrawals from its lending arm.
• The firm blamed FTX’s collapse for “abnormal withdrawal requests which have exceeded our current liquidity.”
Genesis withdrawals paused
Crypto lender Genesis has paused withdrawals after FTX’s collapse drives “abnormal withdrawal requests.” According to the Wall Street Journal, Genesis tried to raise a $1 billion loan from investors to avoid the liquidity crunch. The company said that it needed the credit by 10 am this past Monday, but didn’t receive it. On Wednesday morning, Genesis then announced it would suspend withdrawals from its lending arm. The firm blamed FTX’s collapse for “abnormal withdrawal requests which have exceeded our current liquidity.”
It is unclear how much money Genesis has lost in the collapse of FTX. However, the company’s decision to halt withdrawals raises concerns about its financial stability. FTX was one of Genesis’ largest borrowers, and its collapse has created a liquidity crisis for the lender. It is unclear whether or not Genesis will be able to reopen its lending arm after suspending withdrawals.
This latest development underscores the risks associated with investing in crypto companies. FTX was one of the most popular exchanges in the space, but it collapsed after experiencing technical problems. This has created a wave of panic among investors, and many are worried about the safety of their funds.
The Risks of Investing in Crypto Companies
FTX was one of the most popular exchanges in the space, but it collapsed after experiencing technical problems. This has created a wave of panic among investors, and many are worried about the safety of their funds. This latest development underscores the risks associated with investing in crypto companies.
When investing in any company, there is always risk involved. However, there are certain industries that are riskier than others. The crypto industry is one such example. The volatility of cryptocurrencies makes them a risky investment, and exchanges have been known to collapse without warning. This is what happened with FTX, and investors are still reeling from the losses they incurred.
What This Means for Genesis
The suspension of withdrawals by Genesis is just the latest development in what has been a tumultuous week for the crypto industry. The collapse of FTX has sent shockwaves through the space, and many are still trying to grapple with what happened. For its part, Genesis is blaming FTX for its own troubles, saying that abnormal withdrawal requests have exceeded its current liquidity levels.
Whether or not Genesis will be able to reopen its lending arm remains to be seen. In the meantime, this latest development highlights the risks associated with investing in crypto companies. These companies are often volatile and unpredictable, and collapses like that of FTX can happen without warning. Investors should tread carefully when considering whether or not to invest in this space.
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