The Wall Street Journal reported Thursday, citing a private fundraising letter, that crypto lender Genesis was asking for an emergency loan of $1 billion from financiers before it blocked withdrawals on its website.
JUST IN: Crypto lender Genesis seeks $1 billion emergency loan by Monday.
— Watcher.Guru (@WatcherGuru) November 17, 2022
The paper seen by the Journal mentions a “liquidity crisis owing to some illiquid assets on its balance sheet” at Genesis. Following the unexpected closure of Sam Bankman-cryptocurrency Fried’s exchange FTX on Wednesday, Genesis Global Capital stopped client withdrawals in its lending company.
Genesis stated in an email to Reuters that it had been exploring all conceivable possibilities amid a liquidity shortage caused by the FTX announcement before deciding to temporarily halt redemptions.
The collapse of FTX has sent shockwaves across the business world, reducing liquidity at companies that had exposure to what was once the largest cryptocurrency exchange in the world and sparking inquiries from authorities in a number of jurisdictions.
After rival exchange Binance backed out of a potential merger last week, FTX founder Sam Bankman-Fried quit as CEO, and the company filed for U.S. bankruptcy protection the following day.
Key highlights of this week
Criminal Proceedings Against FTX are now being investigated in the Bahamas
Crypto.com’s Native Token, with Bitcoin and Ethereum, Drops as the FTX Crash
Federal Prosecutors in Manhattan are Investigating the FTX Collapse
Solana Drops more than 50% of its Value with the Bankruptcy of FTX
Banks in the United States Begin Testing a Digital Dollar Blockchain Pilot