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Genesis Trading has bitten the dust, halting withdrawals for its users. Citing the fallout of FTX, the currency trader announced the move on Twitter on Wednesday.
“FTX has created unprecedented market turmoil, resulting in abnormal withdrawal requests which have exceeded our current liquidity,” the company said in a tweet.
“We have taken the difficult decision to temporarily suspend redemptions and new loan originations in the lending business,” the company added.
However, FTX has created unprecedented market turmoil, resulting in abnormal withdrawal requests which have exceeded our current liquidity.
— Genesis (@GenesisTrading) November 16, 2022
Our #1 priority is to serve our clients and preserve their assets. Therefore, in consultation with our professional financial advisors and counsel, we have taken the difficult decision to temporarily suspend redemptions and new loan originations in the lending business.
— Genesis (@GenesisTrading) November 16, 2022
Genesis had previously cut 20% of its workforce after announcing major losses linked to the 3AC fallout and just days ago attempted to reassure the market that its $175m of FTX locked funds “does not impact [their] market-making activities.”
As part of our goal in providing transparency around this week’s market events, the Genesis derivatives business currently has ~$175M in locked funds in our FTX trading account. This does not impact our market-making activities.
— Genesis (@GenesisTrading) November 10, 2022
The announcement also swiftly follows a simliar announcement by BlockFi, which also halted withdrawals due to FTX exposure.
Read more: BlockFi Halts Withdrawals in FTX Wake But Who Else Has Exposure?
However, Genesis did state that not all its entities were in trouble. “Genesis Global Trading, our broker/dealer that holds our BitLicense, is independently capitalized and operated – and separate from all other Genesis entities,” the company tweeted.
We would like to emphasize that Genesis Global Trading, our broker/dealer that holds our BitLicense, is independently capitalized and operated – and separate from all other Genesis entities.
— Genesis (@GenesisTrading) November 16, 2022
Genesis also has a Singapore arm called Genesis Asia Pacific. According to Alpha Impact’s Chief Executive Hayden Hughes, the Singapore arm handled lending on behalf of the parent company and isn’t “technically bankrupt.” Nonetheless, Singaporeans could still be at risk.
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“It’s still potentially a tricky situation for Singaporeans,” he said. “The Singapore entity is not technically bankrupt, but if there was commingling of funds then Singapore users could be affected by this.”
MAS had granted an in-principal approval to Genesis Asia Pacific in June. Its office is located at 120 Robison Road and has around 10 staff.
