Genesis halting customer withdrawals after FTX, 3AC collapses: CoinDesk

Quick Take

  • Genesis Trading provided an update to its clients on its lending business.
  • Genesis Interim CEO Derar Islim made the comments on a client call, according to CoinDesk.

Genesis is temporarily suspending withdrawals and new loan originations, after it took large hits from Three Arrows Capital and FTX.

Genesis will continue to offer over-the-counter trading for spot and derivatives trading, plus its custody services. The comments were made by Genesis Interim CEO Derar Islim during a client call, according to CoinDesk.

Genesis was the largest prime broker in the crypto space. In March, it had $14.6 billion of active loans, according to The Block's Data Dashboard. Yet the lending business took a big hit when the cryptocurrency Luna collapsed, removing $30 billion from the crypto market cap and pushing trading firm Three Arrows into bankruptcy. Genesis had made large loans to Three Arrows, which were not repaid. Genesis' parent company DCG took on the debt, which was estimated north of $1 billion.

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Following on from this, Genesis started significantly slowing down its operations. Last quarter, its loan originations dropped by a third in dollar value compared to the previous quarter. It also reported just $2.8 billion in active loans. At the same time, it made cost reductions, laying off 20% of its workforce. Top executives left the company, including former CEO Michael Moro and former Chief Risk Officer Michael Patchen.

The sudden collapse of crypto exchange FTX was the most recent blow. Genesis said that its derivatives trading arm had $175 million locked up on the exchange. In response, DCG provided Genesis with a $140 million equity infusion.


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Tim is the Editor-In-Chief of The Block. Prior to joining The Block, Tim was a news editor at Decrypt. He has earned a bachelor's degree in philosophy from the University of York and studied news journalism at Press Association Training. Follow him on X @Timccopeland.
Yogita Khatri is a senior reporter at The Block, covering all things crypto. As one of the earliest team members, Yogita has played a pivotal role in breaking numerous stories, exclusives and scoops. With nearly 3,000 articles under her belt, Yogita holds the records as The Block's most-published and most-read author of all time. Prior to joining The Block, Yogita worked at crypto publication CoinDesk and The Economic Times, where she wrote on personal finance. To contact her, email: [email protected]. For her latest work, follow her on X @Yogita_Khatri5.