In early November 2022, Genesis received millions of FTT tokens from FTX and Alameda. Before their collapse, Genesis eventually dropped from a maximum capacity of over 55 billion dollars in net worth to nearly 238 million dollars.
RESEARCH: Genesis received over $1B worth of $FTT from Alameda, FTX in last 3 months.
In FTT 🤡
— whalechart (@WhaleChart) November 21, 2022
As a result, they had to halt all withdrawal requests from customers after receiving several unusual requests that exceeded their available liquidity. Following this, they have been making different attempts to find investors to lend them $1 billion in order to avert a liquidity crunch and save them from declaring bankruptcy.
They have also decided to temporarily halt redemptions and the creation of new loans in the lending business while currently sourcing new liquidity.
Due to FTX and Alameda’s bankruptcy filings, Genesis currently has no ongoing lending relationships with either company.
It was reported that this institutional custody and trading service for digital assets was unable to secure emergency financing from the aforementioned investors. The FTX collapse has a significant detrimental effect that could eventually force Genesis, the lending platform, to declare bankruptcy.
Since they opted to halt withdrawal requests and seek private equity from Apollo Worldwide Management for Capital Research, their customers and clients have been denied access for weeks.
In a letter sent to their clients on Wednesday, they recently stated that they were still working to improve liquidity and that these plans would take weeks instead of days to complete.
It was also stated in their letter that they are focusing on a course of action. Currently, Genesis and the Digital Currency Group owe the customers of the Winklevoss Twins’ cryptocurrency exchange, Gemini, a total of $900 million.
Gemini announced on November 16 that they had partnered with Genesis during the Yield Generating “Earn” program, before Genesis’ liquidity crisis. This resulted in customers of this product being unable to get their money back after Genesis froze withdrawals.
Since they promised to find a solution, their clients have been waiting in anticipation. However, they have a plan to increase their liquidity, which will take weeks rather than days. The fact that they have been working on this for some time and have primarily relied on talking rather than acting, however, is already causing some people to express their dissatisfaction. They claim they want to see results.