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Genesis halts withdrawals .

Genesis Trading has halted withdrawals at its lending unit as the crypto financial services group blamed «unprecedented market turmoil» sparked by the collapse of Sam Bankman-Fried’s FTX. Genesis, which plays a crucial role in digital asset fixed-income markets, said its decision to suspend redemptions and new loan originations followed «abnormal withdrawal requests which have exceeded our current liquidity». The troubles at Genesis are the latest sign that the failure of Bankman-Fried’s FTX crypto exchange and Alameda Research, his trading firm, is sending shockwaves across the industry. According to its website, Genesis had $2.8bn of «active loans» at the end of the third quarter of 2022.

Gemini yesterday said it was «aware» of the problems facing Genesis. Gemini and Genesis are partners on a product that pays customers interest for lending out their crypto assets. Genesis is the primary lending partner. «We are working with the Genesis team to help customers redeem their funds. »

Another Genesis partner, crypto platform Luno, said its customers’ assets were safe, adding that it had «taken steps» to ensure that customers could access their funds «in the event withdrawals from Genesis are not possible». Genesis said it had hired the sector’s «best advisers» and would deliver a plan for the lending unit next week. Genesis said last week it had $175mn in funds stuck on FTX. The failure of Three Arrows Capital battered Genesis. This Singapore-based crypto hedge fund filed for bankruptcy in July when its bets on bitcoin and other cryptocurrencies soured.

Court documents showed that Genesis had lent Three Arrows $2.4bn. Over the summer, DCG assumed Genesis’s $1.2bn claim against Three Arrows.

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