In the latest spread of the FTX implosion, crypto lender Genesis was reportedly seeking a bailout of up to $1 billion on Monday, November 14th, before suspending withdrawals this week.
Genesis Sought $1 Billion Bailout
On Wednesday, November 16th, Genesis Global Capital became the latest victim of the FTX collapse. The firm announced that it has suspended redemptions and new loan originations due to its exposure to FTX.
However, it has been revealed that the lending arm of crypto investment bank Genesis sought a bailout of a $1 billion emergency loan to recoup enough liquidity to meet the high redemption requests.
Genesis cited an “ongoing run on deposits driven mainly by retail programs and partners of Genesis (i.e., Gemini Earn)”. However, the lender failed to get the loan and proceeded to announce a withdrawal suspension two days later.
Genesis in Positive Talks to Raise Funds
Despite halting all customer withdrawals on the 16th, a Genesis spokeswoman told the Wall Street Journal that the confidential document was no longer current.
She noted that Genesis is now having “very positive conversations” with potential investors to recoup liquidity. The same sentiment has been echoed by its partner, Gemini, which said they are working to restore withdrawals.
On the Flipside
- The FTX fallout compounds the loan problem at Genesis after it suffered a $2.4 billion loan defect issued to the bankrupt crypto hedge fund, Three Arrows Capital.
Why You Should Care
The troubles at Genesis stem from its exposure to the bankrupt FTX and Alameda Research, as well as the illiquid assets reportedly on its balance sheet.
Genesis’ exposure to FTX is covered below:
Genesis Trading Reveals It Has $175M Locked on FTX (FTT)
The halt of withdrawals is covered in:
Genesis’ Lending Arm, Gemini Earn, Halt Withdrawals as FTX Contagion Spreads