The lending division of cryptocurrency asset manager Genesis has stopped customer redemptions and new loan originations. This move has already disrupted the ecosystem-wide crypto services. Due to the increasing effects of FTX’s collapse, the decision was taken. Larger liquidity issues in the exchange were caused by big-money traders’ hasty decision not to remove

  

The lending division at cryptocurrency asset manager Genesis has stopped customer redemptions and new loan originations. This move has already disrupted the ecosystem-wide crypto services.

Due to the growing impact of FTX’s bankruptcy, the decision was taken. The ripple effect was caused by the larger exchange liquidity problems.

FTX contagion has reached the crypto credit markets and has already affected Genesis, one their largest operators.

The number one priority of the New York-based firm is to “serve and preserve our clients’ assets.”

“We have therefore made the difficult decision to temporarily suspend all redemptions and new loan originations within the lending business. We are diligently working to increase liquidity to meet the obligations of our lending clients.

According to a series tweets by Digital Currency Group (DCG), the company’s principal investor and venture capital firm, Genesis’ trading and custody arms have not been affected.

Today Genesis Global Capital, @GenesisTrading, took the difficult decision to temporarily suspend new loan originations and redemptions.

Genesis appears to be “working frantically to escape bankruptcy”

However, the end of credit operations can have repercussions on the rest of cryptocurrency industry. Genesis offered backend lending operations for many exchanges that offer yield, such as Gemini Earn, which offers interest rates up to 8.05% on crypto deposits.

Gemini Earn stated immediately after Genesis’ announcement, that it would stop processing Earn redemptions moving forward and did not give a time frame for when they would again be possible.

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