The FTX crash is spreading its deep influence in the market. After this collapse, many Cryptocurrencies are not performing at their best values. Also, many investors are exiting this market and even Crypto whales are stepping back from investing huge funds. Check out more details on crypto-trader.cloud
Crypto firms are also coming under the influence of this crash. Genesis, which is a Cryptocurrency lending firm stopped all their users’ withdrawals. And as per the latest updates by the firm, this halt may last for pretty long! The firm may take an extra period to solve the issues and then proceed to resume the withdrawals.
Reason Behind The Halt Of The Withdrawals
The Cryptocurrency lending firm, Genesis stopped all its redemption and originations of new loans. The major reason behind this situation is the FTX crisis. After the FTX crash, users of Genesis opted to withdraw their funds from the firm as well.
These mass withdrawals led to a halt because they surpassed the firm’s current liquidity limit. So, you can notice that the collapse of FTX is the major reason behind this halt. Besides that, Gemini, another Cryptocurrency exchange halted its withdrawals. This pause was on Gemini’s Earn program and it was linked with Genesis too!
No Solution For This Issue Yet
Genesis assured its users that it will solve the withdrawal issue soon! But, now the firm is announcing that it needs extra weeks to develop a new solution for the problem.
The firm informed all its users that it will need some more time to solve the withdrawal halt. And, it will be here for some more weeks as they are trying to save themselves from filing Bankruptcy petitions. The firm is trying pretty hard to save itself from filing for Bankruptcy, as it will prove to become more chaotic for Genesis.
On 7 December, the firm shared a letter for all its users through Cointelegraph. In this letter, Derar Islim, the interim CEO of this firm shared the updates about Genesis. He shared that it will take them many weeks and not days to revive from this situation. After this period, the firm will probably reopen the withdrawal option.
Besides that, the letter also consisted of further information about the measures taken in the firm at present. The CEO shared that the firm is seeking advice from experienced and professional advisors.
Also, Genesis is working towards maintaining their client assets. And, they are looking for measures for strengthening the liquidity and carrying their business forward. In the last part of this letter, Derar mentions that other entities of this firm are in perfect operation.
More On This Crisis Situation Of Genesis
This firm announced that it has a huge amount of funds with the FTX on 10 November! And this exposure was made through a Tweet, where it revealed that it has saved funds with FTX. This leading firm has around 175 million USD locked with FTX.
Genesis is the lending subsidiary of DCG. DCG attempted to bail out the stuck firm with an amount of 140 million USD on that very same day! But this amount was not enough to solve the crisis and other issues of Genesis.
As on 16 November, Genesis paused all its withdrawals. And the firm mentioned the reason for this halt to be unforeseen market situations with the FTX crash! After this crash, there was a mass withdrawal of a huge amount that crossed the liquidity limit.
But, the firm refused to sign for Bankruptcy filing and there’s a reason for it as well. As the firm failed to show the gap of 1 billion USD in its balance sheet, it didn’t opt to file for Bankruptcy.
Conclusion
After this, the CEO mentioned in the letter that it will be more transparent in its services who are affected by this crisis. Also, they will take appropriate measures and update the users with all the developments on this matter.
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