Cryptocurrency lender Genesis sought a $1 billion emergency loan from investors before telling clients to suspend withdrawals this week, as shockwaves from FTX’s collapse continued to spread through the cryptocurrency industry.
Genesis needs credit funding by 10 a.m. Monday, citing “certain illiquid assets on its balance sheet,” according to a confidential fundraising document reviewed by The Wall Street Journal. This has led to tight liquidity.” The company didn’t get the money.
“The continued run on deposits was primarily triggered by Genesis’ retail projects and partners, Gemini Earn and institutional clients testing liquidity,” the filing said. Gemini Earn is a yield product offered by cryptocurrency exchange Gemini.
A Genesis spokesman said the document was prepared over the weekend and was no longer up to date. The company is in “very active conversations” with potential investors to shore up its liquidity, she added.
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