Genesis Crypto Lender Tells Clients It Works To Safeguard Their Assets

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LONDON, Dec 7 (Reuters) – U.S. crypto firm Genesis is working to preserve client assets and bolster liquidity, it said in a letter to clients on Wednesday, adding that weeks rather than days” to develop a plan.

Genesis lending arm Genesis Global Capital froze client withdrawals on Nov. 16, citing “unprecedented market dislocation” following the collapse of major crypto exchange FTX.

Genesis, owned by venture capital firm Digital Currency Group (DCG), said last week it was seeking to avoid a bankruptcy filing.

“Working with highly experienced advisors and working closely with our owner, DCG, we are evaluating the most effective path to preserve client assets, strengthen our liquidity and ultimately move our business forward,” said Genesis in the letter.

“We anticipate that it will take us additional weeks rather than days to find a way forward.”

All other parts of the Genesis business are “fully operational,” he added.

Crypto lenders, the de facto banks of the crypto world, have exploded during the pandemic, enticing retail customers with double-digit rates in exchange for their cryptocurrency deposits.

Genesis had nearly $3 billion in total active loans at the end of the third quarter, according to its website. Last year, Genesis issued $130.6 billion in crypto loans and traded $116.5 billion in assets.

Genesis and Digital Currency Group owe clients of twin crypto exchange Winklevoss Gemini $900 million, the Financial Times reported on Saturday.

Gemini said in a statement on its website Nov. 16 that it partnered with Genesis for its return-generating “Earn” program, leaving customers of that product unable to redeem their funds when Genesis froze withdrawals.

Reporting by Elizabeth Howcroft; Editing by Tom Wilson and Richard Chang

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