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According to a new tweet<\/a> by Genesis Global on Nov. 16, the institutional crypto lender said it would \u201ctemporarily suspend redemptions and new loan originations in the lending business.\u201d In explaining the decision, the firm cited \u201cunprecedented market turmoil\u201d related to the collapse of troubled cryptocurrency exchange FTX, resulting in \u201cabnormal\u201d levels of withdrawals that Genesis Global claims to have exceeded its current liquidity.<\/p>\n The firm also added that its current liquidity was negatively impacted by the collapse of hedge fund Three Arrows Capital in June. As part of bankruptcy proceedings, the brokerage has filed a $1.2-billion claim against Three Arrows Capital.<\/p>\n Though it\u2019s unclear what the firm\u2019s liquidity levels are, Cointelegraph previously reported that Genesis Global had $175 million<\/a> worth of funds stuck on FTX. In response, Digital Currency Group, the parent company of Genesis Global, sent its subsidiary an emergency $140-million equity<\/a> infusion to cover losses.\u00a0<\/p>\n It\u2019s now apparent that the transfer was insufficient to meet consumer withdrawal demands. As for the next steps, Genesis Global stated:<\/p>\n \u201cWe have hired the best advisors in the industry to explore all possible options. Next week, we will deliver a plan for the lending business. We\u2019re working tirelessly to identify the best solutions for the lending business, including among other things, sourcing new liquidity.\u201d<\/p><\/blockquote>\n Genesis Global also claimed that its spot, derivatives trading and custody businesses remain \u201cfully operational.\u201d In its latest quarterly report, the firm stated that it has $2.8 billion worth of active loans. Since the announcement, its parent company, Digital Currency Group, has clarified that it has no impact on its own operations. However, Genesis Global currently serves as the liquidity provider<\/a> of the popular $6.7-billion Grayscale Bitcoin Investment Trust (GBTC). The fund is currently trading at a discount of nearly 40% to its net asset value at the time of publication in part due to investor speculation on its exposure to Genesis Global.<\/p>\n Update 2:35 PM UTC:<\/em> <\/strong>Cryptocurrency exchange Gemini confirms Genesis Global is the lending partner for its Earn program and will not be able to meet customer redemptions within five business days. Gemini also states<\/a> that the event does not affect the firm\u2019s other products and services and that \u201call customer funds held on the Gemini exchange are held 1:1 and available for withdrawal at any time.\u201d<\/p>\n Update 2:40 PM UTC:<\/em><\/strong> GBTC released a statement<\/a> saying that “all Grayscale products remain safe and secure, held in segregated wallets in deep cold storage by our custodian @Coinbase.” The company also claimed its digital asset products are unaffected, and that the firm does not borrow nor lend with custodied assets.\u00a0<\/p>\n<\/div>\n