Crypto brokerage Genesis suspends withdrawals at lending arm

livemint.com:

Crypto brokerage Genesis is suspending redemptions and new loan originations at its lending business after facing what it described as “abnormal withdrawal requests" in the aftermath of the collapse of FTX.

The withdrawal requests exceeded current liquidity at Genesis Global Capital, the lending arm, according to interim Chief Executive Officer Derar Islim. New York-based Genesis has hired advisers to explore all possible options, including raising new funding, and will deliver a plan for its lending business next week, Islim said.

The move will affect only the lending business, according to Islim, who said Genesis’s spot and derivatives trading and custody businesses “remain fully operational."

Some of Genesis’ biggest lenders include crypto exchange Gemini, which offers a product to users to generate yield through Genesis, according to its website. On Wednesday, Gemini announced that it’s working with Genesis to help customers redeem their funds from the Earn product “as quickly as possible."

FTX’s sudden tumble into bankruptcy is cascading through crypto markets, with panicky customers rushing to pull their assets from other platforms. As a counterparty to many in the sector, Genesis’ financial health has been closely watched as a gauge of the industry’s strength or for signs of potential contagion.

Genesis is one of oldest and most well-known cryptocurrency brokers, offering trading and custody services to professional investors in digital assets. Over the past few years it had also established itself as one of the largest cryptocurrency lenders, allowing funds or other market makers to borrow dollars or virtual currencies to leverage their trades.

The lending business has shrunk dramatically this year, with