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Genesis Sought $1B Loan Before Halting Redemptions

Genesis Sought $1B Loan Before Halting Redemptions #Genesis #Sought #Loan #Halting #Redemptions. Here is what we have for you today on TmZ Blog.

Key Takeaways

Genesis reportedly sought a $1 billion emergency loan before it suspended withdrawals this week.
The Wall Street Journal obtained an internal document to that effect and reported the news today.
Genesis has denied the document’s relevance and stated that it is in positive discussions with investors.

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Early this week, crypto lending firm Genesis sought a $1 billion emergency loan from investors without success before halting withdrawals Wednesday.

Genesis Sought Emergency Loan

Genesis Global Trading sought an emergency loan before halting withdrawals earlier this week.

The Wall Street Journal reported today that Genesis attempted to gain access to a $1 billion credit facility by Monday, November 14, but ultimately failed to obtain those funds, citing a confidential internal document it had seen.

The company cited a “liquidity crunch due to certain illiquid assets on its balance sheet” as the reason for its request. Genesis reportedly experienced a run on deposits related to its retail partners—specifically Gemini Earn, an interest-bearing program from the crypto exchange Gemini.

A Genesis representative denied that the document remains relevant. That representative told the Wall Street Journal that the firm is now in “positive conversations” with investors. She added that the firm is “exploring all possible options” and working to “identify the best solution and outcome possible for clients” during its service suspension.

Genesis first announced that it would suspend withdrawals on Wednesday. Gemini concurrently announced that it would halt its Gemini Earn program.

At that time, Genesis cited “extreme market dislocation and loss of industry confidence” resulting from FTX’s collapse as its reason for suspending services. However, it made little comment about its own liquidity at that time.

Earlier, on November 10, Genesis said that it had just $175 million of funds locked with FTX. The company also emphasized that it had “no material exposure” to FTX’s FTT token or any other centralized exchange tokens.

As such, the firm’s difficulties appear to be related to larger fluctuations in the crypto market—or possibly unrelated investments that have not yet come to light.

Genesis also had exposure to Three Arrows Capital (3AC) and was impacted by the latter firm’s bankruptcy this summer.

Disclosure: At the time of writing, the author of this piece owned BTC, ETH, and other digital assets.

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