Cryptocurrency lender Genesis was seeking an emergency loan of $1 billion from investors before it told clients it was suspending redemptions this week, as the shockwaves from FTX’s collapse continue to reverberate through the crypto industry, the Wall Street Journal reported. A confidential fundraising document viewed by The Wall Street Journal states that Genesis needed access to the credit facility by 10 a.m. Monday, citing a “liquidity crunch due to certain illiquid assets on its balance sheet.” The firm didn’t get the money. “There is an ongoing run on deposits driven mainly by retail programs and partners of Genesis (i.e., Gemini Earn) and institutional clients testing liquidity,” the document says. Gemini Earn is a yield-bearing product offered by Gemini, a cryptocurrency exchange. A spokeswoman for Genesis said that the document was prepared over the weekend and is no longer current. The firm is having “very positive conversations” with potential investors to shore up its liquidity, she added. “Genesis had been exploring all possible options amidst the liquidity crunch resulting from the FTX news,” the spokeswoman said. “After reviewing a number of options, we made the difficult decision to temporarily suspend redemptions and new loan originations in the lending business so that we can identify the best solution and outcome possible for clients."
