Crypto lender Genesis sought out an emergency loan of $1 billion from investors in the wake of FTX’s collapse and ensuing bankruptcy but never got the funds it requested, The Wall Street Journal reported Nov. 17.

The loan request came before the company sent out a notification to clients earlier this week that it would be suspending redemptions.

Citing a  document it reviewed, the WSJ noted that Genesis sought the funds by Nov. 14 because of a “liquidity crunch due to certain illiquid assets on its balance sheet.”

The document reportedly explained an “ongoing run on deposits driven mainly by retail programs and partners of Genesis (i.e., Gemini Earn) and institutional clients testing liquidity.”

A Genesis spokeswoman told the Journal that the confidential document was no longer current and noted that the company is having “very positive conversations” with potential investors to recoup liquidity.

Genesis announced  Nov. 16 that its crypto-lending unit was halting all customer withdrawals.

Due to the default of Three Arrows Capital (3AC) and Genesis’ exposure, the firm faced hundreds of millions in losses of the over-leveraged hedge fund.

Owned by Digital Currency Group (DCG), Genesis’ CEO, Michael Moro, issued a statement earlier this year in response to the fallout of Genesis’ 3AC exposure:

“As we already stated on June 17, we mitigated our losses with a large counterparty who failed to meet a margin call to us. We sold collateral, hedged our downside and moved on. Our business continues to operate normally and we are meeting all of our clients’ needs.”

Both Genesis’ liquidity and the duration profiles of Genesis’ lending entity, Genesis Global Capital were negatively impacted.

The post Genesis sought $1B emergency loan but never got it appeared first on CryptoSlate.

Similar to Notcoin - Blum - Airdrops In 2024

origin »

214 +