Crypto broker Genesis had sought $1B emergency loan before pausing withdrawals - report
Prior to its sudden move in suspending redemptions and new loan originations in the face of FTX's meltdown, crypto brokerage Genesis was reportedly seeking an emergency loan amounting to $1B from investors.
Specifically, Genesis was suffering from a liquidity issue (retail-driven run on deposits) of its own to the point where it needed to gain access to the credit facility by Monday at 10 a.m. ET, though it never received the money, The Wall Street Journal reported Thursday, citing a confidential fundraising document, which was said to be no longer current.
"Genesis had been exploring all possible options amidst the liquidity crunch resulting from the FTX news," a Genesis spokesperson told Seeking Alpha in an emailed statement.
Meanwhile, Genesis is having "very positive" talks with potential investors to help with its liquidity crunch, a spokesperson for Gemini told The WSJ.
The news comes amid the rapid downfall of Sam Bankman Fried's crypto empire, consisting of FTX and trading firm Alameda Research, of which Genesis had strong ties to. Last week the lender disclosed having ~$175M of derivative losses from FTX, and had loans outstanding to Alameda.
The crypto broker was already hit by the collapse of crypto hedge fund Three Arrows Capital earlier in 2022.