By Richard Hines
Just before the suspension of withdrawals, a confidential document reveals that Genesis, one of the top lending firms in the crypto industry, had sought a loan totaling about $1 billion from investors.
Genesis Stops Fund Withdrawals
Earlier this month, on November 16, Genesis Global Trading, a major stakeholder and one of the largest crypto lenders, announced that it would be suspending withdrawals temporarily.
The reason for the decision, according to the memo sent out, is to put things in order and balance the withdrawal requests they were getting, as they seemed out of the ordinary and had exceeded the company’s liquidity at the time.
Also, the company had cited the failure of the FTX crypto exchange owned by Sam Bankman-Fried as a major reason why it had to stop redemptions for the time being.
However, new intel gotten from The Wall Street Journal reveals that the position might not have been all true.
This is because, according to a confidential document revealed, the company on Monday reportedly tried to access an emergency loan to the tune of 1 billion dollars from investors but, for whatever reasons, could not get it.
Following FTX’s collapse announcement, however, Genesis Global Trading went ahead to suspend redemptions, citing the collapse of the crypto exchange, FTX, and the sheer absurd number of withdrawal requests they’d been allegedly receiving.
A Foul Play Or Misinformation?
It appears to a lot of people that Genesis Global Trading is trying to pin the reason for their action on a convenient element, i.e., the FTX demise.
Quite a large percentage of people have expressed their opinion that the crypto lending firm had no doubt been facing some sort of inner turbulence before pinning it on the FTX demise.
The company has however debunked the rumours. According to its spokesperson, Genesis clarifies that the said document had been prepared as soon as the FTX demise was announced
The spokespersons claimed that the document in question is, in fact, quite irrelevant, as the company only had a word with the investors, which was tagged “very positive conversations.”
It appears that, whether Genesis admits it or not, the crypto lending firm is currently not in the best state right now. The particular reason, however, remains unclear.