On Nov. 16, Genesis Global Trading announced it would limit activities on the Genesis Trading platform and Gemini Earn application, including withdrawal suspension.
The company cited “unprecedented market turmoil” in its official announcement.
Heavily influenced by the bankruptcy of FTX and the previous collapse of Three Arrows Capital, Genesis Trading will pause all withdrawals and new loan supplies, confirmed by Derar Islim, CEO of the platform.
All the excitement over the bull market of 2021 has turned into despair. The market is sick and price crashes. It’s a spectacular act of FTX that went down in crypto history, even beating the Terra collapse earlier in June.
As a matter of fact, it was a trigger for a financial crisis for any platforms associated with FTX.
More Fallout is Coming
The crypto withdrawal halting started last week with crypto lender BlockFi’s shocking announcement, saying it would pause all client withdrawals due to FTX and Alameda Research’s liquidity crisis.
The scenario is predictable given the fact that FTX and its venture capital arm worked closely with a vast number of projects.
Genesis Trading operates under Genesis Global, a well-established venture in the world. However, Islam stated that Genesis Trading operates as a standalone business.
Genesis Global’s parent company is Digital Currency Group, a venture capital company that owns CoinDesk.
Upon the bankruptcy filing of FTX, Genesis Trading confirmed $175 million remained locked on the exchange.
Amanda Cowie, vice president of communications and marketing at Digital Currency Group admitted the FTX’s impact on the lending business but she stated that the halting decision, “has no impact on the business operations of DCG and our other wholly owned subsidiaries.”
Following Genesis Trading’s announcement, one of the platform’s strategic partners, Gemini, announced the termination of its withdrawal services. According to CryptoQuant data, institutional investors are abandoning Gemini Exchange as the news broke.
According to Blockworks, the crypto-focused investment firm Multicoin Capital has lost 55% of its capital in the last two weeks. FTX holds 9.7% of the company’s fund assets, including derivatives.
The potential exists that Multicoin will lose everything. However, the asset manager stated that its business will continue to operate, strengthen infrastructure, and limit risks from its partner.
Prolonged Crypto Winter
FTX’s downfall serves as a rude awakening that the wall between rise and collapse is very thin that one could eventually blow up the whole market, and yet, the nascent sector is covered by risks.
The market conditions are almost certain to remain challenging, Coinbase’s new report indicated a bleak assessment of the coming months.
The fall might be even more severe taking into consideration the volume of assets that are currently stranded on the FTX exchange after it filed for bankruptcy.
According to a report by Coinbase, the dominance of stablecoins has increased by 18%, which suggests that a crypto winter could endure until the end of 2023.
Investors soon started withdrawing their funds from various exchanges. Because of this, it’s possible that many businesses will have trouble recovering. It would appear that the future of the market is just as uncertain as it had ever been.
Regulators are drawn to the case.
The House Financial Services Committee has announced that it will conduct an investigation into the failure of FTX and the ramifications that it has for the cryptocurrency business during a hearing that will take place the following month.
The committee has made it abundantly clear that the aim is to hear from executives of both Alameda Research and FTX.
Even though the corporation has submitted a bankruptcy application in accordance with Chapter 11, federal scrutiny kicked off by the Bahamian authorities is in the works.
The primary reason that these organizations exist is to safeguard and defend the interests of those who have been taken advantage of by insidious figures.
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