Crypto Firms Genesis and Gemini Halt Withdrawals Amid FTX Saga

The lending unit of crypto brokerage firm Genesis has suspended withdrawals from its platform, citing the collapse of leading crypto exchange FTX.

Genesis shared the update via Twitter on Wednesday, saying that the action was taken after the company faced “abnormal withdrawal requests” on its platform due to FTX’s contagion. 

The brokerage firm noted that the move will only affect its lending business while its spot and derivatives trading and custody businesses remain fully operational.

The company also stated that it has appointed the best advisors in the industry to explore all possible options.

“We’re working tirelessly to identify the best solutions for the lending business, including, among other things, sourcing new liquidity,” Genesis added.

According to Genesis, its lending unit Genesis Global Capital has $2.8 billion in active loans as of the third quarter of 2022.

Genesis Global Capital is also a lending partner at crypto exchange Gemini’s Earn program, which allows customers to lend their crypto to certain institutional borrowers and earn interest.

Gemini Earn Halts Withdrawals

Gemini announced separately today that it is no longer able to meet customers’ redemptions within the service-level agreement (SLA) of 5 business days and has paused withdrawals on its Earn program due to Genesis’ decision.

The crypto exchange added that it is now working with Genesis to help customers redeem their funds from the program.

“We are working with the Genesis team to help customers redeem their funds from the Earn program as quickly as possible. We will provide more information in the coming days,” Gemini said.

FTX Contagion Spreads Further

Meanwhile, FTX, which recently filed for Chapter 11 bankruptcy in the United States, has spread contagion in the crypto market with prices of top crypto assets dropping significantly. The downfall of FTX also spread panic among crypto investors who are increasingly withdrawing their assets from centralized platforms in the industry.

Genesis is just one of many crypto-related firms that have been impacted by the FTX fiasco. Recently, Coinfomania reported that crypto lender BlockFi is preparing to file for bankruptcy just a few days after suspending withdrawals on its platform due to FTX’s collapse.