Genesis Global halts withdrawals citing 'unprecedented market turmoil'

The troubled company also acts as a liquidity provider to Grayscale Bitcoin Investment Trust.

According to a new tweet from Genesis Global on Nov. 16, the institutional crypto lender said it will “temporarily suspend buyouts and new lending in the lending industry.” To explain the decision, the company cited "unprecedented market turmoil" related to the collapse of the struggling cryptocurrency exchange FTX, resulting in "abnormal" levels of withdrawals that Genesis Global said had exceeded its current liquidity.

The company also added that its current liquidity was negatively affected by the collapse of hedge fund Three Arrows Capital in June. As part of bankruptcy proceedings, the brokerage filed a $1.2 billion claim against Three Arrows Capital.

While it is unclear what the company's liquidity levels are, Cointelegraph previously reported that Genesis Global has $175 million in funds locked up on FTX. In response, Digital Currency Group, the parent company of Genesis Global, sent its subsidiary an emergency equity injection of $140 million to cover the losses.

It is now clear that the transfer was insufficient to meet consumer withdrawal requests. Regarding next steps, Genesis Global said:

“We have hired the best advisors in the industry to explore all possible options. Next week we will present a plan for the lending business. We are working tirelessly to identify the best solutions for the lending industry, including including, among other things, the search for new liquidity."

Genesis Global also said its cash, derivatives trading and custody businesses remained "fully operational". In her last trimester...