Crypto lender Genesis had sought emergency loan of $1 billion – WSJ

Nov 17, 2022
FILE PHOTO: Illustration shows representations of virtual cryptocurrencies on U.S. dollar banknotes

(Reuters) -Cryptocurrency lender Genesis was seeking an emergency loan of $1 billion from investors before it suspended withdrawals on its website, the Wall Street Journal reported on Thursday, citing a confidential fundraising document.

The document viewed by the Journal cites a “liquidity crunch due to certain illiquid assets on its balance sheet” at Genesis.

On Wednesday, Genesis Global Capital suspended customer redemptions in its lending business, citing the sudden failure of Sam Bankman-Fried’s crypto exchange FTX.

“Genesis had been exploring all possible options amidst the liquidity crunch resulting from the FTX news,” the company said in an emailed statement to Reuters, adding that it took the decision to suspend redemptions after reviewing a number of options.

The implosion of FTX has rippled across the industry, hobbling liquidity at firms with exposure to what was once one of the world’s biggest crypto exchanges, and prompting investigations by regulators in several countries.

Last week, FTX filed for U.S. bankruptcy protection and its founder Sam Bankman-Fried resigned as chief executive, after rival exchange Binance walked away from a proposed acquisition.

(Reporting by Manya Saini in Bengaluru; Editing by Maju Samuel)