SAFAKNA TURKEY – There are now concerns that $10 billion in Bitcoin and crypto giant Digital Currency Group (DCG) could run into trouble after crypto lending platform Genesis was forced to put withdrawals on hold and was revealed to be seeking a $1 billion emergency loan. . This week, Genesis, one of the biggest crypto lenders that is part of the sprawling DCG crypto empire, blamed the sudden collapse of FTX.
For this reason, the customer suspended the shooting. DCG was reportedly worth $10 billion last year and also reportedly owns bitcoin and crypto miner Foundry, asset manager Grayscale, crypto exchange Luno, and news outlet Coindesk. Before the withdrawal was put on hold, Genesis requested a $1 billion emergency loan from investors. Joseph Edwards, an investment partner at Securitize Capital, told Reuters. “Genesis has had a target for several days now,” he said. He added that due to Genesis’ close ties to brokers and family offices, this is a “sign of worse results” for the crypto market.
FTX was the cause of the collapse
FTX’s sudden collapse this month was fueled in part by reports that a significant portion of its balance sheet consists of illiquid cryptocurrencies it created. Just last week, FTX filed for bankruptcy protection. Its founder Sam Bankman-Fried (SBF) stepped down as CEO. “Genesis has been exploring all possible options due to the liquidity crunch caused by the FTX news,” a spokesman for the company told the magazine. He also used the following expressions:
After considering a number of options, we have made the difficult decision to temporarily suspend repurchases and new loan creation in the lending business in order to determine the best possible solution and outcome for clients.
The Genesis announcements that followed the FTX explosion caused confusion among the crypto community. Crypto skeptics speculate that this could be the next domino fall as rumors circulate about the future of crypto exchange Gemini and crypto financial services company Galaxy Digital.
Dr. doomsday made a statement
Dr. NYU economics professor Nouriel Roubini aka Doom (Apocalypse) tweeted: “(Genesis, Grayscale, Galaxy, Gemini) are in big trouble and/or crash. From the moon, all the crazy people are now falling to the Earth, ”he said. Cory Clippsten, critic of cryptocurrencies other than Bitcoin and CEO of Bitcoin buying app Swan Bitcoin, spoke of accusations that DCG is “desperately in need of a sale.” “The situation doesn’t seem to be looking good for Genesis,” he said.
However, some in the bitcoin and crypto space were unimpressed by the string of negative reports. “In the long term, it is unlikely that the crypto asset space will shrink significantly,” said Martin Hisbock, head of Uphold Blockchain and crypto research. He also used the following expressions:
The risk of infection is now higher than ever before. However, we believe that this will change. Notice how small the space is still. This is not an Enron or Lehman moment.
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