3.0 min read
Genesis still halts withdrawals
Written byEdna Buckley
December 8, 2022
- Genesis withdrawal freeze may last for an additional few weeks to avoid a possible bankruptcy filing.
- It is stated that they will be working on a recovery plan in the coming weeks.
- Genesis is in consultation with experienced advisors.
- All other units remain fully operational.
- Genesis reiterated that it is committed to being as transparent as possible with those affected and will notify customers of significant developments, including any updates to timelines.
Crypto lending platform Genesis has informed its customers that its withdrawal freeze may last for "an additional few weeks" to avoid a possible bankruptcy filing.
Genesis stated that they will be working on a recovery plan in the coming weeks, which is foreseeable Withdrawal reopening:
“At this point, we anticipate that it will take additional weeks rather than days for us to arrive at a path forward.”
The letter also states that Genesis is "in consultation with experienced advisors" and is "evaluating the most effective ways to protect client assets, enhance our liquidity, and ultimately grow our business."
"All other Genesis units remain fully operational," the letter added.
Genesis Trading, the market-making, and a lending subsidiary of Digital Currency Group (DCG), first hinted at exposure to FTX in a Nov. 10 Twitter post, revealing that it had $175 million in funds tied to the FTX cryptocurrency exchange.
DCG tried to rescue Genesis the same day with a $140 million cash infusion.
However, that didn’t appear to be enough to solve its liquidity problems, as Genesis Global Capital froze withdrawals on Nov. 16, citing “unprecedented market volatility” caused by the FTX crash that resulted in “abnormal” withdrawals that exceeded its liquidity.
On Nov. 21, the cryptocurrency lender dismissed plans to file for bankruptcy “immediately” after failing to close a reported $1 billion hole in its balance sheet.
Shortly thereafter, Genesis confirmed on Nov. 22 that it had hired investment bank Moelis & Co to provide restructuring services to avoid entering Chapter 11.
In the letter, Genesis reiterated that it is "committed to being as transparent as possible with those affected" and will notify customers of "significant developments, including any updates to timelines."
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