Last Updated on November 18, 2022 by Bitfinsider
Before suspending withdrawals on its website, cryptocurrency lender Genesis was requesting a $1 billion emergency loan from investors and cited a private fundraising document as justification.
The WSJ’s report states that Genesis is experiencing a “liquidity crunch due to certain illiquid assets on its balance sheet.”
The sudden failure of Sam Bankman-Fried’s cryptocurrency exchange FTX was cited by Genesis Global Capital as the reason for the suspension of customer redemptions in its lending business on Wednesday.
The decision to halt redemptions was made after considering all available options, the company said in a statement sent to investors via email. “Genesis had been exploring all possible options amidst the liquidity crunch resulting from the FTX news,” it stated.
The collapse of FTX sent shockwaves through the sector, limiting liquidity at businesses exposed to one of the largest cryptocurrency exchanges in the world at the time, and sparking regulatory inquiries in a number of nations.
After rival exchange Binance withdrew from a proposed takeover, FTX last week filed for U.S. bankruptcy protection and its founder Sam Bankman-Fried stepped down as CEO.
Hardware wallets are safe and secure devices that can be used offline. They keep your cryptocurrency offline, making it impossible for you to be hacked. To find out more on the leading hardware wallets, you may view our reviews here: Ledger & Trezor
Disclaimer: The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, legal, tax or other advice. Investing in or trading cryptocurrency or stocks comes with a risk of financial loss.