In the early hours of the day, Genesis, a crypto lending company, stopped customer withdrawals in light of the FTX crash. The crypto space has received hit after hit due to the FTX collapse, and this is one of the many companies that were affected by the crash of the crypto giant.
The FTX collapse happened on Friday last week. It was responsible for setting off a series of events that plunged the crypto space into an even darker hole than it had previously been in due to the bearish market conditions it has been facing almost all year. As many relied on FTX for exchange services and had investments in the company, the collapse hit different sectors of the crypto space, going as far as even crashing the prices of specific cryptocurrencies and de-pegging USDT. The aftermath of the crash may seem like it has eased up a little, but the effects of FTX collapsing hit many companies.
FTX was always seen as a reliable crypto exchange, prompting other companies to invest in them. Along with the company’s collapse went the investments and hope of other companies, mainly since more files for bankruptcy have been recorded in the crypto space in the past few months. While it had become a thing for companies to pack up, the FTX collapse dragged down a lot of smaller crypto companies with it.
FTX collapse has crashed hard on the crypto ecosystem as companies have had to go as far as laying off employees to reduce the load and fallback from their loss after investing or having close relations with FTX.
Genesis Lending Company
Popularly known as Genesis Global Capital, the company serves an institutional clientele and recorded $2.8 billion in total active loans at the end of Q3 2022. unfortunately, they had to put a temporary halt to their lending operations.
The Lending Company temporarily stopped loan redemptions and new loan originations, which are coming in the wake of the collapse of FTX. The company decided due to the failure due to the loss of industry and extreme market dislocation.
The lending aspect of the business is. However, the only part going through a temporary closure does not affect the other Genesis-owned subsidiaries.
Other Loan Companies Affected By The FTX Collapse: BlockFi
Crypto Lending company BlockFi is another lending company that had significant exposure to the FTX collapse. The company may have to look into several options to help them deal with the fallout they are experiencing.
BlockFi took a loan from FTX earlier in the year due to a fear of crashing as quickly as crypto companies were. The loan was made to keep the company afloat, and now it has come to bite back at them.
BlockFi also had several corporate assets held in FTX and was owned by a crypto trading firm that was also owned by the CEO of the FTX exchange, Sam-Bankman Fried.
Unfortunately for BlockFi, it had too many close ties with FTX, and now that the company has filed for bankruptcy, the financial stability of BlockFi is also at stake. They are hanging by a thread, and unless they can find other options to explore to fix the problems created by their exposure to FTX, they may suffer the same fate as other crypto companies that have had to pack up this year.
BlockFi denies that most of its assets were kept under FTX and has not revealed just how much its exposure to FTX was. However, the company will experience a delay in recovering its assets.
Lending companies were just some of the ones affected by the FTX Bankruptcy. In the coming days, more companies will come out to discuss their loss, it is still not completely clear how big of a hit the crypto space took from the collapse of this company, but before the end of the week, more stories will emerge on the descent.
Sam-Bankman Fried has already begun receiving threats of court actions, and as more continue to come in, the crypto space will find out how many companies were affected.
Some companies have already come out to debunk any association with FTX to keep their customers and investors from panicking, and companies like Genesis Global Capital have decided to halt services to reduce any chances of loss they may incur from the collapse.