Genesis says it needs more time for lending crisis solution

Crypto lender Genesis told clients on Wednesday that it's continuing to work toward finding a solution for its troubled borrowing and lending unit but that it will need more time to do so. 

"While we are committed to moving as quickly as possible, this is a very complex process that will take some additional time," interim CEO Derar Islim said in a letter to clients obtained by The Block. "We believe we can arrive at a solution."

Progress has been made in refining business plans for client offerings that include cost reductions and "driving efficiencies," he said, adding that the company's derivatives and spot trading businesses are fully operational

Genesis Global Capital, the lending business of Genesis Trading, had to halt withdrawals and new loan originations in November amid fallout from the collapse of the FTX crypto exchange. It has warned about  potential bankruptcy, and the company said last month that a solution could take weeks.

Digital Currency Group

"We continue working with our advisors, in collaboration with DCG and advisors appointed by various client groups, to evaluate options to preserve client assets and move the business forward," Islim said, referring to parent company Digital Currency Group.

DCG has been facing heat involving other subsidiaries including Gemini, whose Earn program has been frozen since mid-November. Gemini co-founder Cameron Winklevoss earlier this week accused DCG head Barry Silbert of "bad faith stall tactics" and comingling funds in an open letter he posted on Twitter.

Islim, former Genesis COO , stepped into the role of interim CEO after Michael Moro resigned as CEO in August. The company's active loans fell over 80% in 2022 from a peak of $14.6 billion in March to $2.8 billion in September, The Block's Data Dashboard shows.