FTX logo with crypto with $100 bill shown for illustration. FTX has filed for bankruptcy in the US, seeking court protection as it seeks to return users’ funds.
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In the latest fallout from FTX collapsed quickly Last week, the lending arm of crypto investment bank Genesis Global Trading is suspending new loans and repayments, the company announced in a statement. string of tweets Wednesday.
The bank’s lending division serves an institutional client base and is called Genesis Global Capital. At the end of the third quarter, it had more than $2.8 billion in total active loans, according to the company’s website.
“We recognize how difficult the past week has been due to the impact of the FTX news. At Genesis, we are fully focused on doing everything we can to serve our customers and navigate the difficult market environment. hey,” Genesis wrote in a tweet.
“Our #1 priority is to serve our customers and preserve their assets.”
Genesis Trading, which operates as a broker/dealer of Genesis Global Capital, is capitalized independently and operates separately from that lender, Interim CEO Derar Islim told clients in a statement. a call on Wednesday, according to CoinDesk. He added that Genesis’ trading and custody services are still operating normally.
The decision reflects a sign of contagion outside of BlockFi, which is reportedly preparing for a potential bankruptcy filing, according to The Wall Street Journal. The crypto lender has halted customer deposit withdrawals and admitted that it has “substantial exposure” to now-bankrupt crypto exchange FTX and its sister trader, Alameda Research.
The magazine, citing people familiar with the matter, added that BlockFi is also planning to lay off more of its workers as it prepares for Chapter 11 filings, although the company has not says that most of their assets are managed by FTX.
A representative from BlockFi did not immediately respond to requests for comment.
Sam Bankman-Fried’s crypto exchange FTX has applied for Chapter 11 Bankruptcy Protection in the US last week, according to a company statement posted on Twitter. Bankman-Fried also stepped down as CEO and was succeeded by John J. Ray III, although the outgoing director will continue to assist with the transition.
Some 130 additional affiliated firms are part of the proceedings, including Alameda Research, Bankman-Fried’s cryptocurrency trading arm, and FTX.us, the company’s US subsidiary.
In a few daysFTX went from a $32 billion valuation to bankruptcy as liquidity dried up, customers demanded withdrawals and rival exchange Binance ripped non-binding agreement to buy the company. Founder of FTX Bankman-Fried admit last week that he “f — ed up.”
FTX may have more than 1 million creditors, according to an update filed for bankruptcy on Tuesdayhinting at the massive impact of its demise on crypto traders.
