The Wall Street Journal reports that the institutional crypto lender Genesis asked investors for an emergency loan of $1 billion before announcing that clients would temporarily be unable to take out their funds.
Earlier this week, crypto lending firm Genesis suspended fund withdrawals due to liquidity issues caused by the collapse of the FTX exchange and Three Arrows Capital (3AC).
“Genesis had been exploring all possible options amidst the liquidity crunch resulting from the FTX news. After reviewing a number of options, we made the difficult decision to temporarily suspend redemptions and new loan originations in the lending business so that we can identify the best solution and outcome possible for clients.”
In a confidential fundraising document that The Wall Street Journal saw, Genesis asked for access to the credit facility by 10 AM on Monday claiming that illiquid assets on the firm’s balance sheet caused a liquidity crunch.
Reads the document,
“There is ongoing run on deposits driven mainly by retail programs and partners of Genesis (i.e., Gemini Earn) and institutional clients testing liquidity.”
Genesis did not get the money. A spokeswoman for the firm says the document is no longer current and the company now engages in positive conservation with potential investors.
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